Today's Commodity News : 06.11.2019
Oil slips on huge US crude build; hopes for US-China trade talks check losses
Oil prices dropped on Wednesday after industry data showed a larger-than-expected build-up in U.S. crude stockpiles, but expectations for an easing of trade tensions between the United State and China capped losses. Brent crude futures were at $62.73 a barrel by 0120 GMT, down 23 cents, or 0.4%, from their previous settlement. Brent settled up 1.3% at $62.96 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 21 cents, or 0.4%, from their last close to $57.05 per barrel. In the previous session, WTI settled 1.2% higher at $57.23 a barrel. U.S. crude inventories rose by 4.3 million barrels in the week ended Nov. 1 to 440.5 million barrels, according to data from the American Petroleum Institute (API) released on Tuesday. That was nearly triple analysts' forecast for an increase of 1.5 million barrels. [API/S] Official data from the Energy Information Administration (EIA) is due later on Wednesday. However, hopes for a breakthrough on trade in talks between the United States and China, the world's two biggest oil consumers, remained and kept price falls in check. China is pushing U.S. President Donald Trump to drop more tariffs imposed on Beijing as part of a 'Phase One' U.S.-China trade deal, according to people familiar with the negotiations.
"Investors will continue to take cues from U.S.-China trade talks," ANZ Research said in a note.
Looking ahead, next year's oil market outlook may have upside potential, Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday. But in the next five years, OPEC would supply a diminishing amount of oil, squeezed by rising U.S. shale output and other rival sources, according to the oil producer group's 2019 World Oil Outlook, released on Tuesday. OPEC and its partners, including Russia, previously agreed to cut oil production by 1.2 million barrels per day (bpd) until March 2020. They will meet in early December to review output policy.
Sugar mills don't need green clearance to produce ethanol: Centre
The Centre announced on Tuesday that a environmental clearance would not be required to produce additional ethanol from sugarcane juice as it does not cause pollution, a move that may benefit farmers and the cash-strapped sugar mills. Sugar mills and farmers have been at loggerheads because of non-payment of dues to the latter. The mill owners have maintained that due to excess production of sugar and fall in the price, even they had not been getting their dues. As of June 2019, the mills owed nearly Rs 20,000 crore to farmers across the country. With a smooth obstacle-free production of additional ethanol, the crisis may ease. "In yet another major decision for the benefit of farmers and sugar industry, the central government has declared that no separate environment clearance is required to produce additional ethanol from 'B' heavy molasses as it does not add to the pollution load," Union Environment Minister Prakash Javadekar tweeted. The environment ministry said with the incentives, sugar mills are expected to undertake production of ethanol from B-heavy molasses and other by-produces or products. Molasses, a thick fluid that is a by-product of sugar extraction from sugarcane, is used in alcohol manufacturing among other products. "This shall result in incidental increase in the production of ethanol without any increase in the total pollution load in the existing distilleries or sugar mills to which environmental clearances have already been granted," the ministry said in a statement. "To obviate the need for undertaking fresh environment impact assessment (EIA) or public consultation in all such cases of increase in production capacity, the government has given a clarification relating to the issuance of environmental clearance in order to facilitate the sugar mills to undertake additional production of ethanol from B-heavy Molasses in place of using C-heavy Molasses without any increase in the total pollution load," it said.
According to the ministry, it has been clarified that all such proposals to undertake additional ethanol production from B-heavy molasses/sugarcane juice/sugar syrup/sugar may be considered under the provisions of the EIA notification, 2006, by the expert appraisal committee for granting environmental clearance. The EIA notification of 2006 makes it mandatory to get a clearance for all new projects, their expansion and modernisation as well as change in product mix.
Onion prices increase 40% in 7 days as rainfall hits supply
Onion prices increased by up to 40 percent in several Indian cities in the last seven days after heavy rains disrupted supply, The Times of India reported.
Retail price of the kitchen staple in Delhi shot up to Rs 80 per kg on November 5, data maintained by the Consumer Affairs Ministry shows. The same stood at Rs 70 and Rs 50 per kg in Chennai and Kolkata, respectively.
The Centre said it will relax fumigation norms and facilitate import of the key kitchen staple from Afghanistan, Egypt, Turkey and Iran to boost domestic supply. A decision in this regard was taken at the meeting of an inter-ministerial committee, headed by Consumer Affairs Secretary Avinash K Srivastava, which reviewed the prices and availability of onions in the country.
Currently, imported onions are allowed in the country after the commodity is fumigated with Methyl Bromide and certified by the exporting nation. Importers are required to pay huge charges if fumigated at Indian ports. "It (supply) is expected to improve in the coming days. ...Union government to act as a facilitator for import of onion. Phytosanitary and fumigation requirement to be suitably liberalised to facilitate imports," said a November 5 statement issued by the Consumer Affairs Ministry allaying importers' concerns.
Indian missions in Afghanistan, Egypt, Turkey and Iran will be requested to facilitate the supply of onions to India, a senior Consumer Affairs Ministry official told PTI. This is expected to facilitate the immediate import of 80 containers and diversion of 100 containers in the high seas to India.
Copper prices are expected to trade higher today
On Tuesday, copper prices on the LME ended higher by 0.46 percent to close at $5877.0 per tonne. Rising expectation of a possible trade deal between U.S. & China might improve the demand prospects for the red metal in turn supporting the Copper prices. Prices were also supported after major copper producer Antofagasta trimmed its output forecast for Chile as the impact of the protest might be greater than expected.
Outlook
Progress in the trade negotiations between U.S. & China might improve the demand prospects for industrial metals and support the prices. On the MCX, Copper prices are expected to trade higher today; international markets trading lower by 0.11 percent at $5939.25 per tonne.
Oil prices dropped on Wednesday after industry data showed a larger-than-expected build-up in U.S. crude stockpiles, but expectations for an easing of trade tensions between the United State and China capped losses. Brent crude futures were at $62.73 a barrel by 0120 GMT, down 23 cents, or 0.4%, from their previous settlement. Brent settled up 1.3% at $62.96 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 21 cents, or 0.4%, from their last close to $57.05 per barrel. In the previous session, WTI settled 1.2% higher at $57.23 a barrel. U.S. crude inventories rose by 4.3 million barrels in the week ended Nov. 1 to 440.5 million barrels, according to data from the American Petroleum Institute (API) released on Tuesday. That was nearly triple analysts' forecast for an increase of 1.5 million barrels. [API/S] Official data from the Energy Information Administration (EIA) is due later on Wednesday. However, hopes for a breakthrough on trade in talks between the United States and China, the world's two biggest oil consumers, remained and kept price falls in check. China is pushing U.S. President Donald Trump to drop more tariffs imposed on Beijing as part of a 'Phase One' U.S.-China trade deal, according to people familiar with the negotiations.
"Investors will continue to take cues from U.S.-China trade talks," ANZ Research said in a note.
Looking ahead, next year's oil market outlook may have upside potential, Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday. But in the next five years, OPEC would supply a diminishing amount of oil, squeezed by rising U.S. shale output and other rival sources, according to the oil producer group's 2019 World Oil Outlook, released on Tuesday. OPEC and its partners, including Russia, previously agreed to cut oil production by 1.2 million barrels per day (bpd) until March 2020. They will meet in early December to review output policy.
Sugar mills don't need green clearance to produce ethanol: Centre
The Centre announced on Tuesday that a environmental clearance would not be required to produce additional ethanol from sugarcane juice as it does not cause pollution, a move that may benefit farmers and the cash-strapped sugar mills. Sugar mills and farmers have been at loggerheads because of non-payment of dues to the latter. The mill owners have maintained that due to excess production of sugar and fall in the price, even they had not been getting their dues. As of June 2019, the mills owed nearly Rs 20,000 crore to farmers across the country. With a smooth obstacle-free production of additional ethanol, the crisis may ease. "In yet another major decision for the benefit of farmers and sugar industry, the central government has declared that no separate environment clearance is required to produce additional ethanol from 'B' heavy molasses as it does not add to the pollution load," Union Environment Minister Prakash Javadekar tweeted. The environment ministry said with the incentives, sugar mills are expected to undertake production of ethanol from B-heavy molasses and other by-produces or products. Molasses, a thick fluid that is a by-product of sugar extraction from sugarcane, is used in alcohol manufacturing among other products. "This shall result in incidental increase in the production of ethanol without any increase in the total pollution load in the existing distilleries or sugar mills to which environmental clearances have already been granted," the ministry said in a statement. "To obviate the need for undertaking fresh environment impact assessment (EIA) or public consultation in all such cases of increase in production capacity, the government has given a clarification relating to the issuance of environmental clearance in order to facilitate the sugar mills to undertake additional production of ethanol from B-heavy Molasses in place of using C-heavy Molasses without any increase in the total pollution load," it said.
According to the ministry, it has been clarified that all such proposals to undertake additional ethanol production from B-heavy molasses/sugarcane juice/sugar syrup/sugar may be considered under the provisions of the EIA notification, 2006, by the expert appraisal committee for granting environmental clearance. The EIA notification of 2006 makes it mandatory to get a clearance for all new projects, their expansion and modernisation as well as change in product mix.