OIL MARKETS TAKE A BREATHER AFTER JUMP THE DAY BEFORE | TODAY COMMODITY MARKET NEWS UPDATE 26 SEPT 2017.

COMMODITY MARKET NEWS

Precious Metals

Precious metals are likely to open higher as geopolitical tensions flared up once again after comments from North Korea. North Korea has upped the rhetoric after its foreign minister declared that they can shoot down US warplanes. Gold gained even as the dollar has staged a slight rebound at the start of this week. The euro was under pressure as Angela Merkel won with a lesser margin than expected in Germany and the far-right party gained vote-share. On the whole, the Janet Yellen speech today and US GDP data later in the week will provide further directional triggers to gold. Janet Yellen’s comments will be closely analyzed to gauge the pace of future rate hikes.

Base Metals

Base metals recovered from early morning to close at highest point for day yesterday. Zinc and nickel prices have risen after steep falls late last week while copper prices have stabilised, but gains have been limited by caution over demand outlook from top metals consumer China and stronger US dollar. Tight supplies of immediately available metal raised premium of cash zinc to three-month contract to its highest since 2007 at $US66, which is likely to encourage deliveries into LME warehouses.

Energy

Crude oil prices are likely to extend gains after jumping 3% yesterday as tighter physical markets have revived market sentiment. Turkey threatened to halt Kurdish oil exports through its Ceyhan port in response to referendum yesterday. Baker Hughes data show that number of oil rigs in US fell by 5 to 744 last week. OPEC meeting comments showed that decision about extending the supply cuts will be taken in January. OPEC/non-OPEC technical committee estimates that compliance to output cuts reached 116% in August. Brent prices have been supported as demand for prompt-loading barrels at North Sea crude market has jumped and supply remains lower due to oilfield maintenance. Near term bias for oil remains positive and prices sustaining above $50 will further support technical buying.