Published on 21/03/2017 11:17:16 AM | Source: Sushil Finance

We expect Natural gas prices to trade positive - Sushil Finance

Posted in Commodities Reports | #Commodity Tips #Sushil Finance


Gold

Gold prices edged higher to a two-week peak on Monday as the dollar slid to a six-week low after a G20 weekend summit dominated by the U.S. administration's protectionist stance.

The precious metal has been rising since Wednesday, when the dollar dropped after the Federal Reserve raised U.S. interest rates but stopped short of predicting a sharper acceleration in monetary tightening over the next two years.

Breaking a decade-long tradition of endorsing open trade, G20 finance ministers and central bankers made only a token reference to trade at the weekend, acquiescing to an increasingly protectionist United States.

 

Outlook

We expect gold prices to trade negative on the back of profit booking after up-move in prices.

 

Silver

Silver rose 0.3 percent to $17.37 an ounce.

 

Outlook

We expect silver prices to trade negative on the back of profit booking after up-move in prices.

 

Crude Oil

Oil prices slipped on Monday, despite news that OPEC was supportive of extending a six-month deal to cut output as investors continue to grapple with worries about growing U.S. oil output and high inventories. Prices briefly surged into positive territory after sources within the group said the Organization of the Petroleum Exporting Countries was considering extending production cuts into the second half of 2017.

The spike repeated a pattern that has emerged in the last 10 days after a market rout that saw big speculators exit bullish positions after weeks of persistently high inventory figures. Crude has made a few attempts to rebound after a 10 percent decline a week-and-a-half ago, but the surges have generally been brief.

Analysts say speculative investors are likely to keep reducing bullish positions, thanks to optimism amongst U.S. producers boosting drilling activity, which in part will offset OPEC attempts at reducing supply. Growing U.S. production is playing into concerns about the effectiveness of the deal between members of OPEC and other producers. Official data showed that Saudi Arabia's crude exports fell by about 300,000 bpd in January, but last week's OPEC report showing production rebounded in February means this figure was of less comfort, traders said.

 

Outlook

We expect crude oil prices to trade positive on the back of short covering after drop in prices.

 

Natural Gas

U.S. natural gas futures on Monday climbed to their highest in a week as the market focuses on a report later this week that is expected to show a big storage draw. Earlier Monday morning, however, prices were down about 1 percent on forecasts for warmer weather and light heating demand through early April.

Heating demand is fast becoming less of a market factor as temperatures edge higher for the spring, traders and analysts said, making high stockpiles, low production and rising exports increasingly more important.

Analysts forecast utilities pulled 139 billion cubic feet of gas from storage during the cold week ended on March 17. That would be the biggest withdrawal for the week on record, according to data from U.S. Energy Information Administration (EIA) going back to 1994. Last year, utilities injected 13 bcf into storage during the same week, while the five-year average for the seven-day period is for a withdrawal of 21 bcf.

 

Outlook

We expect Natural gas prices to trade positive on the back of expectation of Natural gas inventory to show a big storage draw.

 

Base Metals

Copper prices slipped on Monday as worries about demand from top consumer China were reinforced by expectations of ample supplies and higher inventories in exchange-monitored warehouses.

Inventories of copper in warehouses monitored by the Shanghai Futures Exchange have more than doubled to 325,278 tonnes since early January. Stocks in LME-approved warehouses, at 332,975 tonnes, are up nearly 70 percent since early February.

Worries about demand after G20 finance ministers dropped a pledge to keep global trade free and open weighed on prices of industrial metals overall.

 

Outlook

We expect base metal prices likely to trade volatile on the back of mixed fundamentals.

 

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