At one point on Friday, crude oil futures were down over 4 percent, cutting into most of its weekly gains, as traders reacted viciously to a report that Saudi Arabia did not expect an agreement at talks next week among major crude exporters aimed at freezing production.The selling was triggered after Bloomberg reported that the Saudi’s did not expect a “decision” at the informal meeting set for Algiers on September 26 to September 28.Because of the volatility created by Friday’s price action, I believe investors are going to play the market tight on Monday, setting up the possibility of an inside range. Of course, there are going to be stories coming out of the informal meeting so we could see some volatility due to headline reactions.
The headline the bullish traders would like to see is one that says Saudi Arabia and Iran are discussing a production freeze. Then I’d like to see a headline that says Russia is brokering a deal between Saudi Arabia and Iran.
Because just like the discussions in Doha in April, I don’t think a deal will get done unless Saudi Arabia and Iran are on the same page.
LME Copper rose last Friday with positions opening by longs but then met resistance because there was no more positive news. LME copper will fluctuate at USD 4,840-4,875/mt on Monday and SHFE 1611 copper will range between RMB 37,650-37,950/mt. In China’s domestic market, spot copper should be traded at premiums of RMB 100-120/mt on Monday.
China Aluminum International Trading Co. (Chalco Trading) announced big hike in aluminum prices it offered in major markets today, it said on its WeChat.
After 6 years of exploration, Xinjiang announced it found a world-class ultra-large lead-zinc mine September 25.In China’s domestic market, demand at downstream battery producers may increase with the upcoming China’s National Day Holidayduring October 1-7 while supply of spot lead remains tight, helping lead price up. But with expected declines in SHFE lead, spot lead may drop by RMB 25/mt to RMB 14,400-14,550/mt today.
Nickel prices are expected to get a boost as Philippine’s major ore producing region will enter the monsoon season soon.What months are the rainy season in the Philippines?A lot of rain (rainy season) falls in the months: May, June, July, August, September, October and November. Manila has dry periods in January, February, March and April. On average, the warmest month is May. On average, the coolest month is December. Nickel ore inventories at seven major Chinese ports dropped in the week ending Sep. 23.
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