Daily Metal and Energy Outlook 23 April 2019
BULLION – Bullion counter may open on positive note as gold prices edged up on Tuesday as Washington moved to choke off Iran’s oil revenues, prompting safe haven buying, but gains were capped by a strong dollar and Asian shares hovering near a nine-month peak. The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, a move to choke off Tehran’s oil revenues which sent crude prices to six-month highs on fears of a potential supply crunch. Russia raised its gold holdings by 19.4 tonnes in March, data from the International Monetary Fund showed on Monday. U.S. home sales fell more than expected in March as rising demand stoked by declining mortgage rates and slowing house price inflation continued to be frustrated by a lack of properties, especially in the lower-priced segment of the market, data showed on Monday.
ENERGY- Crude oil may extend recent gains as oil prices hovered near 2019 peaks in early trading on Tuesday after Washington abruptly moved to end all Iran sanctions waivers by May, pressuring importers to stop buying from Tehran. The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran eight biggest buyers, most of them in Asia, to continue buying limited volumes. Before the reimposition of sanctions last year, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries (OPEC) at almost 3 million barrels per day (bpd), but April exports have shrunk well below 1 million bpd, according to ship tracking and analyst data in Refinitiv. Saudi Arabia is the world biggest exporter of crude oil and OPEC de-facto leader. The group is set to meet in June to discuss its output policy. U.S. natural gas futures settled higher on Monday as warmer-than-normal weather boosted cooling demand, ending six days of declines.
BASE METAL – Base metals prices may trade with firm bias. Manufacturers in China facing trade barriers are deploying an array of moves to try to keep foreign customers giving discounts, tapping tax breaks, trimming workforces and, occasionally, shifting production overseas to skirt tariffs. Nickel prices fell on Tuesday, with new data showing a global nickel deficit had narrowed at the end of February, while investors worried that China may ease its stimulus measures. The global nickel market deficit narrowed to 2,000 tonnes in February from a revised deficit of 3,700 tonnes in January, and was much smaller than a 7,200-tonne deficit in the same month last year, the International Nickel Study Group said on Monday. Sentiment was also weighed down by worries that China will ease up on simulative policies after some signs of stabilization in its economy, pulling Chinese stocks down in their worst session in nearly four weeks on Monday.
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