Oil climbed to the highest level in over a year as tightening global supplies and signs of strength in physical markets aided crude’s virus-recovery rally.
Futures rose 2.3% in New York, earlier rising above $55 a barrel for the first time in a year. Crude has been climbing steadily since late last year as coronavirus vaccines and producers’ supply curbs boost expectations of a tighter market. OPEC and its allies expect to drain an oil surplus by the middle of the year.
Meanwhile, there continues to be signs of strength in the market for physical barrels of oil, with Royal Dutch Shell Plc bidding for more cargoes of benchmark-grade North Sea crude on an S&G Global Platts pricing window. The bids come a day after the oil major staged the heaviest buying by a single company since at least 2008.
Markets have since stabilised. Riding the wave of a commodity supercycle , Brent the international benchmark for oil and WTI have each surged 10 per cent since the beginning of 2021. Oil s gains, propelled by recovery in Asia, a softer dollar and vaccination programmes in developed economies, have also been aided by the group s proactiveness.
At the start of the year, Opec linchpin Saudi Arabia, unilaterally decided to implement a 1 million barrel a day cut until March. The oil bloc shelved an earlier plan to bring 2m bpd back to the market and is drawing back 7.2m bpd from the market for three months from January, equivalent to about 7 per cent of global supplies.
OPEC’s Number Two Iraq Misses Goal to Make Up for Quota Breaches
Bloomberg 2/2/2021 Anthony Di Paola
(Bloomberg) Iraq missed its own target to slash oil output to a six-year low and make up for breaching its OPEC quota.
The group’s biggest producer after Saudi Arabia pumped 3.87 million barrels of crude a day last month, only 10,000 fewer than in December, according to a Bloomberg survey and tanker-tracking data. Exports were also nearly unchanged at 3.24 million barrels daily.
While the numbers put Iraq close to its official first-quarter quota of 3.86 million barrels a day, the country had said it would pump just 3.6 million in January and February, which would be the lowest level since early 2015.
The Commodities Feed: Silver rally
Metals
Spot gold edged higher yesterday, while silver saw another surge in prices, with spot prices rising as much as 11.5% at one stage, and trading briefly above $30/oz for the first time since 2013. Retail demand has increased significantly, with large inflows into silver ETF’s. The iShares Silver Trust exchange-traded fund (largest silver-backed ETF) witnessed inflows of nearly US$944 million on Friday, while total known silver ETF holdings increased by almost 35moz yesterday to total nearly 940moz.
A number of retail dealers said that they were unable to process orders until Asian markets opened yesterday due to the extraordinary demand for bars and coins. Demand was almost six times more than a normal day on Monday and dealers expect existing premiums to rise quickly in the current scenario. Meanwhile, the US Mint on American Eagle silver-coins sales showed that total sales jumped 24% YoY to 4.8moz in January; the largest monthly sales fo
Oil Rises Most in Weeks Swept Up in Broader Market Enthusiasm
Bloomberg 2/1/2021 Andres Guerra Luz
(Bloomberg) Oil rose to the highest in more than two weeks, lifted by broader market strength and optimism over demand recovering this year.
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Futures climbed 2.6% in New York on Monday, the largest jump in about three weeks, with the S&P 500 rebounding from the worst selloff since October. Meanwhile, Saudi Aramco sees oil demand returning to pre-Covid levels later this year, saying it is confident the worst of the pandemic is now in the rearview mirror.
Royal Dutch Shell Plc raided the North Sea physical oil market on Monday in a forceful trading play, buying the most cargoes of benchmark grades in a single day in 10 years in the S&P Global Platts pricing window.