Oil falls below $65/bbl in first weekly drop
Oil fell below $65 a barrel on Friday in its first weekly loss since late November, erasing the week’s risk premium added since a US drone strike killed a top Iranian general as investors focused on rising US inventories and other signs of ample supply.
However, markets were still eyeing the longer-term risks of conflict, and prices were briefly supported on Friday by new US sanctions on Iran in retaliation for its missile attack on US forces in Iraq this week.
Also, a Russian navy ship “aggressively approached” a US Navy destroyer in the North Arabian Sea on Thursday, the US Navy’s Bahrain-based Fifth Fleet said in a statement on Friday.
Brent crude LCOc1, the global benchmark, settled at $64.98, down 39 cents. West Texas Intermediate crude CLc1 fell 52 cents to end at $59.04.
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Gold moves higher
Gold edged higher on Friday, and was on track to post a weekly gain for fifth straight week, as fresh sanctions on Iran by the United States stoked uncertainty supporting demand for the bullion.
The targets of the sanctions included Iran’s manufacturing, mining and textile sectors as well as senior Iranian officials who Washington said were involved in the Jan. 8 attack on military bases housing US troops.
Spot gold rose 0.4% to $1,557.86 per ounce by 2:12 p.m. EST (1912 GMT) and was up about 0.4% for the week. US gold futures settled up 0.4% at $1,560.1 per ounce.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell for the second straight session on Thursday.
Elsewhere, palladium was up 0.4% at $2,115.88 per ounce, having hit a record peak of $2,149.50 in the previous session on supply constraints. The metal was still on track for its biggest weekly rise since mid-June, up more than 6% so far.
Silver was up 0.9% at $18.06 per ounce. Platinum gained 1.3% to $978.48 per ounce but was down 0.2% for the week so far.
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Pakistan gas shortfall set to almost double next year
Amid an ongoing controversy over gas shortages, the federal government on Wednesday said the shortfall would almost double next year unless infrastructure constraints were phased out through cooperation of the stakeholders concerned, particularly Sindh.
At a meeting of the Cabinet Committee on Energy (CCoE) presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, the ministry of energy reported that gas shortfall was increasing due to about 7 per cent decline in domestic gas production and 5pc growth in consumption when compared with last year, effectively creating a 12pc gap between the demand and supply.
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India opens up coal mining further
In an attempt to attract investments in coal mining, the Union Cabinet on Wednesday approved the promulgation of Mineral Laws (Amendment) Ordinance 2020. The ordinance allows coal mining for any company present in sectors other than steel and power, and dispenses away with the captive end-use criteria.
While the move will help create an efficient energy market, usher in competition and reduce coal imports, it may also put an end to state-run Coal India Ltd’s (CIL’s) monopoly. India’s coal sector was nationalised in 1973. Despite having the world’s fourth largest coal reserve, India imported 235 million tonnes (mt) of coal last year, of which 135 mt valued at Rs171,000 crore could have been met from domestic reserves, coal and mines minister Pralhad Joshi told. The move will also help India gain access to high-end technology for underground mining used by global miners. New Delhi’s move comes at a time when the window for fossil fuels is rapidly closing, and the global energy landscape has been rapidly evolving, with fundamental changes to the investment culture amid growing climate concerns.
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Wisconsin lost 10pc of its dairy farms in 2019
More than 800 dairies went out of business in Wisconsin last year, making 2019 among the worst years ever recorded for dairy closures in the state. This is a big deal,” said Mark Stephenson, the director of dairy policy analysis at the University of Wisconsin-Madison’s College of Agricultural Life Sciences. It’s a trend happening across the country, Stephenson added. Waning consumer demand, loss of trade and an oversupply of milk have driven milk prices too low for farms to profit. America’s largest milk producer, Dean Foods, filed for bankruptcy protection in November, citing “a challenging operating environment” and declining “consumer milk consumption.” And on Sunday, a second major American dairy company, Bordon Dairy, also filed for bankruptcy protection. The U.S. Department of Agriculture has not yet released data on the number of dairies that closed throughout the country last year, but experts expect that — like the Wisconsin numbers — they will be high. For the last five years, milk prices have been too low for the majority of farmers to make a profit — and many could not earn enough to cover their bills. There have been multiple farms close around here,” said Dan Brick, the owner of Brickstead Dairy, a 1,000-cow farm in Greenleaf, Wis. “There was one that just had an auction last week. It was a 500-cow dairy, and they just closed and auctioned off their cows. People are struggling. In the final months of 2019, milk prices rose to 20 cents per pound — the highest they had been since 2014. As of Tuesday, the price was roughly 17 cents per pound, according to the Chicago Mercantile Exchange — still higher than the average price during the last five years, which was mostly below 16 per pound.
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3 Reasons why silver can beat gold in 2020
- Silver is undervalued when you look at the gold-to-silver ratio, which now stands at a staggering 1:86.
- JP Morgan has been manipulating the markets, and 2020 will be the year more of its top-level employees are convicted.
- As countries around the world make efforts to stimulate growth and manufacturing, demand for silver could skyrocket.
Recent geopolitical turmoil between the United States and Iran has sent the gold price soaring. Silver has yet to follow suit and remains below the September 2019 highs. Silver has been consolidating for several years and remains well below all-time highs of roughly $50 per ounce. Right now, there are three good reasons why silver could explode past the $20 per ounce mark in 2020.
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China’s portside iron ore trading active
China’s imported iron ore prices recorded some gains on January 8, with Mysteel’s portside iron ore index up Yuan 7/wmt ($1/wmt) on day to reach a two-month high of Yuan 704/wmt FOT Qingdao including 13 percent VAT. As for the seaborne market, Mysteel assessed the 62percent Australian Fines Index at a three-month high, up $0.85/dmt on day to $95.15/dmt CFR Qingdao. On Wednesday, steel mills in North China were relatively active in buying iron ore. Traders at ports in Tangshan indicated that local mills tabled more bids today for their normal operations ahead of the coming Chinese New Year holidays later this month. Consequently, more deals were heard concluded at ports.