|Day's Range||302.90 - 303.20|
(Bloomberg) -- A barrage of trade-talk headlines and attacks in the Middle East has resulted in a turbulent year for the oil industry, but an unusual buying strategy has made it even more challenging for firms servicing China’s independent refineries.The refiners, known as teapots and clustered in Shandong province, have been keeping their counter-parties up all night due to a purchasing method known as trigger pricing. Rather than buy cargoes at a one-off price based on monthly averages, the industry norm, these processors lock-in prices in portions at different levels over a period of around a month.If, for example, a teapot buys a shipment of 1 million barrels of crude it can pay for it in separate lots of as small as 1,000 barrels. When the refiner thinks prices look sufficiently cheap it buys part of the shipment and can purchase more later. And given that oil generally moves more in European and American trading hours, many of these orders - sent via phone calls, email or instant messaging services -- are made in the wee hours of the Asian night.While trigger pricing gives teapots a chance to time their buying to get an overall lower price, their ability to out-smart the market depends on a combination of acumen and luck. Regardless of their success, however, counter-parties that include trading houses, oil majors and Chinese state-owned companies are finding themselves swamped with orders and paperwork.“It’s just like gambling: sometimes they win, sometimes they lose,” said Chen Tong, an analyst at First Futures in Tianjin. “For the trading houses, it’s a never-ending job, being constantly stuck on cellphones when clients put in orders.”International oil majors and bigger traders -- such as Trafigura Group Ltd. and Vitol Group -- are able to respond to the round-the-clock orders from their offices across Asia, Europe and the U.S. BP Plc has even launched a mobile phone app -- BP TriGO -- for teapots to input their requests, which is supported by a team of traders who execute the orders in real time.Chinese companies such as PetroChina Co. and Sinopec have staff on standby 24-7 in Beijing to service the teapots. For these companies, and others, fear of missing out on business means they have no choice but to respond at all hours.Recently, there’s been a lot to keep them awake. Rapid shifts in sentiment on the U.S-China trade relationship, White House sanctions, heightened tension in the Middle East and speculation over OPEC’s output limits have all buffeted crude this year. Volatility in West Texas Intermediate oil has averaged 36% over the past 12 months, compared with 25.7% in the previous year.“This year, there’s been so many events for oil markets to trade on,” said Gao Jian, an analyst at Zhaojin Futures Co. in Shandong. “There are loads of distractions and price deviations, which have resulted in a higher frequency of triggering by teapots in order to control costs.”Trigger-pricing predates the teapots, which have only been able to import crude since 2015, originating with Chinese buyers of commodities like soybeans and fuel oil. The high-risk approach appealed to the entrepreneurs who moved into refining from other industries such as textiles and oil-seed processing.The Chinese teapot sector has been challenging for international oil companies to penetrate due to issues around credit-worthiness and non-performance on deals. But the independent refiners have grown quickly as Beijing awarded them more import quota and have become increasingly hard to ignore. Teapots processed a record 1.79 million barrels a day of imported crude last month, more than twice as much as three years earlier, according to data from industry researcher SCI99.Trigger pricing owes much of its popularity to the “delusional confidence” of teapots who think they can beat the market, said Chen at First Futures. But it’s the Chinese way of doing things, so the counter-parties “can’t do much about it if they want a seat in the market,” he said.(Updates with details on teapot processing volumes in 11th paragraph.)To contact Bloomberg News staff for this story: Sarah Chen in Beijing at firstname.lastname@example.org;Alfred Cang in Singapore at email@example.com;Serene Cheong in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Serene Cheong at email@example.com, Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Malaysian palm oil futures fell more than 1% on Friday as prices of rival oils on the Dalian exchange and the Chicago Board of Trade slipped, though a weaker ringgit limited the losses. The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 0.2% to 2,524 ringgit ($610.84) per tonne, extending losses to a third straight session. The contract opened 1.3% lower at 2,520 ringgit.
India's gold demand is expected to fall to its lowest level in three years in 2019, the World Gold Council (WGC) said on Tuesday, as domestic prices climb to a record against a backdrop of falling earnings in rural areas, a key source of custom for the precious metal. Gold demand in 2019 could drop 8% from a year ago to around 700 tonnes, the lowest since 2016, said Somasundaram PR, the managing director of WGC's Indian operations. In a report, the WGC said India's gold consumption in the quarter ended September slumped nearly a third from a year ago to 123.9 tonnes.
Excessive rains and an October snowstorm have stalled the harvest in the U.S. grain belt's northern tier, one more blow to farmers already struggling with the effects of planting delays and a trade war that has pressured commodity prices. The corn and soybean harvests are especially delayed in North Dakota and Minnesota - precisely the states suffering the most from the U.S.-China trade war due to their reliance on exporting to Asia through West Coast ports.
(Bloomberg) -- Follow Bloomberg on LINE messenger for all the business news and analysis you need.Some of the world’s most influential palm oil traders, analysts and plantation executives will meet this week on the tropical island of Bali. In the limelight is the implementation of Indonesia’s ambitious biodiesel mandate as well as a brewing trade spat between No. 2 supplier Malaysia and the world’s top palm oil importer India.The Indonesian palm oil conference, which will be held between Oct. 30 and Nov. 1, features price forecasts from veteran analysts Dorab Mistry of Godrej International Ltd., James Fry, chairman of LMC International Ltd. and Oil World Executive Director Thomas Mielke.Here are the key things to watch:1\. India-Malaysia Trade SpatAsia’s latest trade spat is dividing palm oil giants in the region and keeping investors on edge. It started when Malaysia’s Prime Minister Mahathir Mohamad criticized India’s policy in Kashmir, triggering a backlash which led to an influential processors’ group in Mumbai calling on its members to avoid buying Malaysian palm oil. Indian buyers have started switching to Indonesia over worries the government may restrict or hike taxes on Malaysian imports.Any action by India to curb palm oil from Malaysia could depress prices and hurt incomes of farmers and smaller plantation firms. Palm oil is Malaysia’s biggest agricultural export and India its top customer -- India’s purchases more than doubled between January and September from a year earlier.There doesn’t seem to be a resolution in sight as New Delhi has not publicly commented and Mahathir says he won’t retract his comments about Kashmir. Primary Industries minister Teresa Kok has rebuked the Indian processors’ group for advising members to shun palm, while Darell Leiking, International Trade and Industry Minister, will seek to engage with India to resolve the spat.2\. Biodiesel WatchIndonesia will roll out its B30 biodiesel mandate starting Jan. 1 and the industry is closely watching whether the top grower can fully implement the higher blend that’s anticipated to boost palm consumption and support prices.Industry analysts and investors predicting that palm oil prices will rise in the first quarter are banking on Indonesia to soak up nearly 10 million tons of palm for biofuel. The country’s infrastructure capability however is still in question and the pace of the B30 program will be a “price mover” in coming months, according to Oscar Tjakra, senior analyst for grains and oilseeds at Rabobank. In Malaysia, the mandate will be doubled to B20 in the transport sector and is expected to lift consumption to 1.3 million tons a year.3\. U.S.-China Trade WarWhile palm oil isn’t directly involved in the trade war between the world’s two largest economies, it’s not completely isolated either. The protracted spat has roiled commodity markets and clouded the outlook of global economic growth, which could impact consumption of edible oils. Chinese tariffs on U.S. imports have constrained supplies of soybeans and soybean oil in the country, boosting demand for palm. That could reverse if the trade conflict is resolved.“Demand from India and China will fluctuate due to several factors like the trade war between the U.S. and China, but demand from those two big buyers will keep increasing,” according to Derom Bangun, chairman of the Indonesian Palm Oil Board.4\. European Palm Curbs, SustainabilityThe conference comes hot on the heels of controversy surrounding the palm oil industry after haze from burning Indonesian forests choked Southeast Asia only a few weeks ago. The Council of Palm Oil Producing Countries says oil palm plantations are generally not the source of burning, but that hasn’t allayed accusations that some farmers still use illegal slash-and-burn techniques to clear land for crops. Indonesian authorities have named more than 200 companies including oil palm, pulp producers and individual farmers as responsible for starting the fires.That’s fueling momentum for anti-palm oil campaigns and for the EU to curb its palm oil purchases on environmental grounds. The most pressing is the Delegated Act that seeks to phase out palm-oil based biofuel by 2030 -- which both Malaysia and Indonesia are challenging through the WTO.Now there’re fears the EU may limit palm oil in food. Malaysia said the EU’s cap on glycidyl esters and its proposed limits on 3-MCPD esters may impact palm oil consumption in food products, and that the industry must be ready to anticipate challenges to “trade impediments” from the bloc.5\. ProductivityA nagging worry on the minds of growers is production. Faced with scarce land and labor, yield growth has stagnated in recent years especially from Malaysia, and the industry wants to know how this will affect the long-term outlook. This year’s conference will highlight government policies on palm oil as the sector grapples with an increasingly complex business environment.“Productivity is not increasing as fast as we want,” said Kanya Lakshmi Sidarta, secretary general of Indonesian Palm Oil Association, known as Gapki. “Production is showing signs of plateauing because there has not been land expansion and there is permit moratorium in place,” she said.To contact the reporters on this story: Anuradha Raghu in Kuala Lumpur at firstname.lastname@example.org;Eko Listiyorini in Jakarta at email@example.comTo contact the editors responsible for this story: Anna Kitanaka at firstname.lastname@example.org, James Poole, Atul PrakashFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
"The recovery is on its way," proclaimed one analyst, speaking about the dry bulk sector ... in 2014. "The trough is now squarely in the rear-view mirror," said another a half-decade ago. As it turned out, dry bulk earnings set fresh lows in early 2015, came up a little, then crashed to an all-time nadir in early 2016.
COT on commodities in week to October 22 showed hedge funds buying futures across all three sectors. Buyers returned to oil, gold and silver albeit at a modest pace while grains once again saw the bulk of demand
Investing.com - A surprise weekly drawdown in U.S. crude stocks and OPEC jawboning about deeper production cuts have suddenly energized dreary trading in oil, pushing prices to three-week highs.
Investing.com --- Gold prices crept back above $1,500 an ounce Thursday as more weak economic data out of Europe and Japan kept up hopes of yet more monetary stimulus.
The EPA's plan to begin replacing 4 billion gallons of ethanol lost to waivers for oil refiners was met with displeasure Tuesday by some trade groups.
President Trump is trying to patch up his badly damaged relationship with American farmers, and large US refiners are the most likely losers of this ‘compensation package’
Investing.com -- Crude oil prices rose on Wednesday after various unconfirmed reports breathed life into hopes that the U.S. and China can at least agree a temporary and partial truce to their multi-faceted dispute when trade talks resume on Thursday.
The benchmark palm oil contract for the December delivery on the Bursa Malaysia Derivatives Exchange was up 1% at 2,196 ringgit ($523.36) per tonne, as of 0312 GMT, its highest levels since Sept. 23. The January palm oil contract on the Dalian exchange rose 1.8% on Wednesday, while the January soyoil contract on the Dalian exchange was up 1.2%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The US added eight Chinese tech firms and a number of Xinjiang government departments to a trade blacklist, citing abuses of Uyghur Muslims there.
Trump's EPA has granted 85 exemptions to oil refineries. The agency now says it will begin accounting for that lost demand in 2020.
Currently, investors have low expectations for an October rate cut. However, a weak Manufacturing PMI report could raise the chances. This would weaken the dollar and likely fuel a short-covering rally in gold.
* Palm rises to intraday peak of 2,173 rgt/T * Market charts second day of gains * EU CPO price forecast to rise to $620/T by Q2 - analyst (Updates with closing prices, quote) By Emily Chow KUALA LUMPUR, Sept 26 (Reuters) - Malaysian palm oil futures rose more than 1% in afternoon trading on Thursday after bullish forecasts at an industry conference in India. Prices also gained support by Malaysia's announcement that it would grant export duty exemptiuons for crude palm kernel oil and RBD palm kernel oil from Oct. 1 until the end of next June to reduce stockpiles in the domestic market. The benchmark palm oil contract for December delivery was up 1.1% by the close of the Bursa Malaysia Derivatives Exchange at 2,169 ringgit a tonne.
Investing.com - U.S. oil stockpiles rose by 2.4 million barrels last week, the Energy Information Administration reported Wednesday, confounding expectations for a drawdown in crude.
Investing.com - Oil prices extended losses on Wednesday, with crude falling below the $56 per barrel level as Saudi Arabian production came back online and concerns over the demand outlook weighed.
Investing.com -- Gold futures were consolidating gains in early trading in New York Wednesday, supported by a fresh surge in risk-aversion after a combative speech at the UN General Assembly by President Donald Trump.
Gold prices climb Tuesday to log their highest finish in nearly three weeks, after President Donald Trump criticized China and took a hard-line stance on Iran during his speech at the United Nations General Assembly, pressuring U.S. stocks and boosting the metal’s haven appeal.
Based on the early price action and the current price at 26918, the direction of the December E-mini Dow Jones Industrial Average the rest of the session on Tuesday is likely to be determined by trader reaction to the downtrending Gann angle at 26933.