Energy Market Updates

Brent crude oil is experiencing a decline of 1.7%, currently priced at $89.36 per barrel. This decrease in price reflects the ongoing trends in the energy market.

European Benchmark Gas Increases

On the other hand, the European benchmark gas has seen an increase of 2.5%, reaching EUR37.91 per megawatt hour. This rise in price indicates a positive trend in the European gas market.

Gold Futures Experience Minor Decrease

Gold futures have witnessed a minor decrease of 0.2%, with prices currently at $1,837.50 per troy ounce. Although there is a slight reduction, gold remains a valuable commodity in the market.

LME Three-Month Copper Futures Decline

LME three-month copper futures have also experienced a decline of 0.2%, currently valued at $7,993 per metric ton. This decrease in price reflects the challenges faced by the copper industry.

Wheat Futures Witness Significant Decrease

Notably, wheat futures have seen a significant decrease of 1.9%, with prices now at $5.58 per bushel. This decline indicates challenges within the wheat market.

TOP STORY: Saudi Arabia Extends Oil-Production Cut to End of the Year

Saudi Arabia has made the decision to extend its oil production cut until the end of the year. This measure aims to address the tightening supply and provide support for energy prices.

According to a statement from the Saudi Press Agency, the oil-production cut of a million barrels a day will continue until December. Since its implementation in July, the Kingdom’s production is expected to remain around 9 million barrels a day throughout November and December.

BP is currently exploring the possibility of selling a 49% stake in its U.S. oil-and-gas pipeline network located in the Gulf of Mexico. This potential divestment allows the British oil major to meet its debt reduction targets and sustain its dividend.

MARKET TALKS: Palm Oil Supported by Weak Ringgit

Palm oil has shown a slight increase, supported by the weakening of the ringgit. A weaker ringgit positively impacts palm-oil exports as it makes ringgit-denominated crude-palm-oil futures and product prices more affordable for international buyers. However, there is a risk of falling prices if there is no positive news to support the market. As per technical analysis, palm oil prices hover around the support level of MYR3,700 per ton. The Bursa Malaysia Derivatives contract for December delivery closed MYR9 higher at MYR3,717 per ton.

Metals Face Pressure Amid Prospect of Further Rate Hikes

Metals are currently under pressure due to the possibility of further rate hikes. This uncertainty in the market affects the performance of metals and creates challenges for the industry.

Metal Prices Under Pressure

Metal prices continue to face downward pressure, as the Federal Reserve’s potential monetary tightening boosts safe-haven assets. Three-month copper is currently down 0.8% to $7,943.50 a metric ton, while aluminum is 0.9% lower at $2,272.50 a ton. Gold has also declined by 0.4% to $1,834.60 a troy ounce, and the ICE dollar index has risen by 0.1% to 107.05.

According to ANZ, the recent U.S. jobs data showing a robust labor market increases the likelihood of more rate hikes from the Fed. ANZ also notes that subdued manufacturing activity both in China and the U.S. adds to the bearish market sentiment. Additionally, LME copper inventories have reached the highest level since June 2022, standing at 168,000 tons.

Oil Slides Ahead of Key OPEC Meeting

Oil prices are sliding ahead of an important OPEC meeting scheduled for later. Brent crude has dropped by 0.6% to $90.32 a barrel, and WTI is down 0.7% to $88.61 a barrel. The OPEC Joint Ministerial Monitoring Committee will convene for its regular market monitoring meeting.

Standard Chartered suggests that producers at the meeting are unlikely to be less cautious about production due to uncertainties surrounding the global economy and central bank policies. The bank states that it is premature for the market to anticipate any reduction in Saudi Arabia’s voluntary output cuts. According to Standard Chartered, the recent decline from $97 a barrel for Brent demonstrates the fragility of the current price situation.

Dairy Prices Stabilize

After a period of prolonged decline, dairy prices appear to have reached a bottom, according to Westpac. The recent GlobalDairyTrade auction witnessed a 4.8% increase in whole milk powder prices and a 6.6% lift in skim milk powder prices. Overall, the broader GDT Price Index rose by 4.4% compared to the previous auction.

Nathan Penny, senior agricultural economist at Westpac, emphasizes caution regarding the outlook but mentions that the risks around their forecast for the 2023/24 milk price are now more balanced than before. Westpac maintains its forecast of NZ$6.75/kg.

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