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Russell: China increased its crude stockpiles in October, as oil prices declined.
In October, China's crude oil storage volumes likely increased as a result of robust imports and domestic production outweighing an increase in refinery processes. According to calculations based upon official data, China's crude oil surplus was 690,000 barrels a day (bpd), up from 570,000 bpd a month earlier. China's rate of adding crude oil inventories to its reserves is seen as an important factor for the demand of crude oil in the world’s largest importer. It also adds uncertainty to price forecasts. According to the National Bureau of Statistics, data released on November 14, China's refineries produced 14.94 million barrels per day in October. This is an increase of 6.4% over the same period last year. However, this is down from the previous two-year peak of 15.26 millions bpd achieved in September. In October, crude imports totaled 11.39 million barrels per day (bpd) while domestic production stood at 4.24 million. This gives a total of 15.63 millions bpd available for refiners. After subtracting the refinery processing, there are 690 000 bpd of crude oil that can be added to strategic or commercial storages. China does not reveal the volume of crude oil flowing in or out of strategic and commercial stocks, but it can be estimated by subtracting the amount processed from total crude produced domestically and imported. Not all the excess crude is likely to have gone into storage. Some of it was processed in plants that are not included in the official data. Even if you allow for these gaps, however, it's clear that China imported crude oil at a much higher rate from March to July than was necessary to meet its domestic fuel needs. The surplus crude for the first ten months of the current year is approximately 900,000 barrels per day (bpd), given that the combined imports and domestic production are 15.65 millions bpd. Refinery processing was 14.75 million barrels per day. The surplus was built up from March, after refiners drew on their inventories for the first time in January and Feburary when they processed crude at a rate that exceeded available crude by approximately 30,000 bpd. It was the first since September 2023 when the throughput of crude oil from domestic production and imports exceeded the amount imported. Price Impact The decline in inventories for 2025 was accompanied by rising oil prices. Brent futures, the benchmark contract, reached their highest level so far this season of $82.63 per barrel on 15 January after steadily increasing from levels of around $70 at the beginning of December. Since then, crude oil prices have been trending lower with some spikes due to geopolitical tensions like the conflict between Israel & Iran in June. Brent crude oil ended Monday at $64.20 per barrel, the midpoint of the $60 to $70 range which has been in place since August began. China's refiners, as well as the authorities in Beijing, don't discuss their strategies publicly, but it is clear that they import more crude oil when they consider prices reasonable and reduce them when prices are too high. In September, the excess crude fell to 570,000 bpd from 1.10 million in August. Brent crude reached a six-month-high of $81.40 per barrel on June 23, when the Israel-Iran war was raging. China's refiners are now buying more crude oil as prices have fallen since June. China's storage flows are a floor and a ceiling for crude oil prices, which means that China is likely to absorb any global surplus as OPEC+ increases output targets. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Fear and caution grip the markets
Rae Wee gives us a look at what the European and global markets will be like tomorrow. The Asian markets were again a sea of red on Tuesday. This gloomy mood is expected to spread into Europe as investors prepare for the earnings report from artificial intelligence darling Nvidia, and the long-awaited U.S. employment report due later this week. The market sentiment leading up to the release was fragile. Nvidia had a high bar for delivering results that would blow the roof off and justify all the massive investments companies pour into AI. The semiconductor giant's AI chips have been a bellwether theme for a number of companies in the technology sector, as well as those involved with the massive infrastructure expansion that supports AI. The sector is still shaken by the fear of a bubble. It has been compared to the dotcom boom-bust in the 1990s. The latest sign that there is unease comes after a regulatory filing revealed that the hedge fund of tech billionaire Peter Thiel sold its entire stake in Nvidia. SoftBank Group, a Japanese company, announced last week that it had sold the 32.1 millions Nvidia shares held by it in October. The proceeds were used to fund CEO Masayoshi son's AI drive. In Japan, Prime Minister Sanae Taichi will meet Bank of Japan Governor Kazuo ueda in the afternoon. The yen has been falling to multi-month lows, and is now above 155 dollars per yen. This is close to levels that led to a currency intervention in Japan last year. Satsuki Catayama, Japanese Finance Minister, said that she was "alarmed by the one-sided and rapid movements" on the foreign exchange markets. Takaichi has promoted those who support fiscal and monetary stimuli to important posts, which is a blow to their efforts. The Nikkei reported on Saturday that Japan may spend around 17 trillion yen (110 billion dollars) for Takaichi’s first stimulus package. The yield on the JGBs of 20 years has reached its highest level since July 1999. The following are the key developments that may influence Tuesday's markets: Fed's Barr Barkin Logan Speak U.S. Factory Orders (August)
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Gold continues to fall on a firm dollar, and Fed rate-cut betting eases
Tuesday saw gold fall for the fourth consecutive session, as a strong dollar and diminished expectations of an interest rate reduction in the U.S. next month weighed on it. As of 0444 GMT, spot gold was down by 0.9%, at $4,010 an ounce. U.S. Gold Futures for December Delivery fell 1.6% to $4.009.20 an ounce. "The dollar has been a little stronger today, and some of the speculation lengths have also been reduced in this last week. "The gold market will consolidate for the time being," said Marex analyst Edward Meir. After a steep rise in the session before, the dollar remained stable against its competitors. Gold becomes more expensive when the dollar is stronger. Last week, Congress reached an agreement on the end of the longest U.S. Government shutdown in history. The absence of official data about the economy dampened expectations that the Federal Reserve would cut rates again in December. Fed Vice-Chair Philip Jefferson said Monday that the U.S. Central Bank needed to "proceed gradually" with additional rate cuts. This has dented expectations of a reduction next month. Gold that does not yield tends to perform well in low interest rate environments and times of economic uncertainty. This week, the focus will be on U.S. economic data, such as the nonfarm payrolls September report, which is released on Thursday. These releases can provide clues about the health of the largest economy in the world. "Expectations that the Fed would cut again next months dropped from a peak of almost 100% shortly after the September announcement to just 42% over night. This has weighed down on the appetite of investors for gold," ANZ stated in a report. The medium-term investment demand is expected to be supported by structural tailwinds such as geopolitical uncertainties, concerns over U.S. debt sustainability and de-dollarisation. Silver spot fell by 1.2%, to $49.58 an ounce. Platinum fell 1%, to $1.517.73 and palladium dropped 1.5%, to $1.372.05. (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)
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Oil prices drop as Russian hub resumes loading; markets consider sanctions impact
The oil prices fell on Tuesday, as traders assessed the impact of Western sanctions against Russian flows, and supply concerns eased after the loading of cargo at a Russian hub was resumed following a drone strike in Ukraine. Brent crude futures fell 46 cents or 0.72% to $63.74 per barrel as of 0420 GMT. U.S. West Texas Intermediate crude futures fell 45 cents or 0.75% to $59.46 per barrel. According to two industry sources, and LSEG data, the Russian port of Novorossiysk resumed oil loadings Sunday after a two-day interruption caused by a Ukrainian drone and missile attack. In a note, IG analyst Tony Sycamore noted that crude oil prices are marginally lower as "reports indicate that loadings at Novorossiysk have resumed earlier than expected," he wrote. The exports of crude oil from Novorossiysk, and the nearby Caspian pipeline consortium terminal, which together represent about 2.2 millions barrels per day or approximately 2% global supply, were stopped on Friday. Crude prices rose by more than 2% in one day. Now, traders are refocusing their attention on the long-term effects of Western sanctions on Russian crude oil flows. The U.S. Treasury reported that sanctions imposed on Rosneft in October and Lukoil in November are already cutting into Moscow's oil revenue and will eventually reduce Russian export volumes. ANZ Research stated in a report that Moscow's crude oil has started trading at a substantial discount to global benchmarks. Vivek Dhar is a mining and energy commodities analyst at Commonwealth Bank of Australia. He said that buyers are concerned about the potential breach of sanctions as they assess the amount of oil stored on tankers. However, he added that Russia has proven its ability to adapt sanctions. We expect that any disruption caused by U.S. Sanctions will only be temporary, as Russia will find ways to circumvent sanctions again. According to a senior White House official, President Donald Trump will sign legislation imposing sanctions on Russia as long as the final decision is in his hands. Trump said that Republicans were drafting legislation to sanction any country that does business with Russia. He added that Iran may also be included. Goldman Sachs predicted that oil prices would decline until 2026. The company cited a large supply wave which keeps the market in excess. Goldman Sachs said that Brent oil prices could reach $70 per barrel by 2026/2027, if Russian production drops more dramatically.
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Tiny Tuvalu treasures its'special relationship with Taiwan'
The Prime Minister of Tuvalu, who visited Taiwan on Tuesday during a period of increasing geopolitical rivalry between China and the United States in the Pacific, said that his tiny country values its "special relationship". Tuvalu is only one of 12 countries, including three in the Pacific region, that maintains formal diplomatic relations with Chinese-claimed Taiwan. Beijing has intensified its efforts to win back Taiwan's remaining allies. Feleti Teo said he was always impressed by the warmth with which he is welcomed whenever he visits Taiwan. Teo stated that "Tuvalu treasures its special relation with Taiwan. A relationship built on democratic values shared, mutual trust, and unwavering co-operation." "A relationship which has been able to withstand the test of time and has proved durable and sustainable over the last 46 years." Tuvalu said that it would sign its first treaty during its visit to Taiwan as part of its diplomatic campaign for formal international recognition. Its perpetual statehood Even as lucrative fishing grounds Sea levels are rising The land of the island is now submerged. China closely followed the national elections in Tuvalu last year, especially after one of the candidates for leadership said that Taiwan relations would be reviewed. Lai said that the visit symbolizes their friendship and respect for diplomatic relations. "I'm confident that Prime Minister Teo’s visit will help advance the partnership between our countries. Lai stated that together, we would face the challenges of geopolitics and climate changes. Lai visited Tuvalu in December last year as part of his tour of Taiwan’s Pacific allies. This included Palau and Marshal Islands. Nauru changed its diplomatic recognition from Taipei to Beijing last year, just after Lai's election. China claims Taiwan is a province and has no state-to-state relations. Taipei strongly disputes this view. Tuvalu, which has a population of 11,00 spread across nine low-lying islands, is dependent on donors, including Taiwan, to strengthen its coastline. Taiwan, Australia, Japan and the United States also contributed funding to connect Tuvalu to international telecommunications for the first-time via a submarine cable. (Reporting and editing by Stephen Coates; Ben Blanchard)
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Copper continues to lose value as the dollar gains strength
The dollar strengthened on Tuesday as the U.S. Federal Reserve was divided over a rate cut in December. In addition, the delayed September payrolls were the main focus. By 0243 GMT, the most traded copper contract at the Shanghai Futures Exchange had dropped to 12 084 yuan per metric tonne. The benchmark copper for three months on the London Metal Exchange fell 0.37%, to $10 739 per ton. Dollar benefited from a decline in expectations that the Fed will cut rates next month. The dollar's strength makes commodities traded in greenbacks more expensive for investors who use other currencies. The official September employment data will be released Thursday, after the government shutdown in the United States delayed its release. Investors are more sensitive to the labour market signals, as they reassess near-term Federal Reserve path. Nickel, among other SHFE base materials, led the selloff Tuesday, falling 1.79% to an average of 114,700 Yuan per ton. Metal used in stainless steel and batteries fell by as much as 1.8% to 114.68 yuan per ton. This is the lowest price since July 2022. The London Metal Exchange's three-month nickel fell 0.58%, to $14,565 per ton. This is the lowest price since April. Traders said that nickel fundamentals have been showing signs of weakness in the past two weeks. Nickel pig iron Nickel, a raw material used to make stainless steel, traded at just over 900 yuan a unit. This is down from 950 yuan at the end of October. Nickel sulfate is used as a battery feedstock Also showed signs of weakness entering November. LME nickel stocks Nickel stocks rose to 252,090 tonnes on November 17 while the corresponding gold stocks decreased On Friday, the SHFE sheds reached 35 826 tons. Shanghai aluminium fell by 1.01%. Zinc dropped 0.56%. Lead lost 0.75%. Tin declined 0.19%. Aluminium fell 0.75% on the LME, while zinc dropped 0.45%. Tin was down 0.34% and lead only 0.05%.
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Dalian iron ore continues to rise but profit-taking limits gain
Dalian iron ore prices rose on Tuesday, adding to the gains of the previous session, but profit-booking and a shrinking basis were responsible for the modest increase. As of 0201 GMT on China's Dalian Commodity Exchange, the most traded January iron ore contract was up 0.45% to 784.5 Yuan ($110.38), after gaining nearly 2% Monday. As of 0151 GMT the benchmark December iron ore price on the Singapore Exchange had fallen by 0.42% to $103.95 per ton. This was after a day-long gain of over 1%. A Singaporean trader, who spoke on condition of anonymity because he was not authorized to speak with the media, said: "Spot liquidity is quite lukewarm. It weighs on sentiment." Mysteel, a consultancy, reported that the volume of seaborne and portside cargoes fell by 25,8% and 24,3%, respectively, from Monday's previous session. A Shanghai-based analyst said that higher prices have reduced mills' purchasing appetite. Industrial participants remain bearish on the price trend due to rising inventories and seasonal weakening of steel demand. The trader from Singapore said that the upward momentum also slowed down due to the narrowing of the basis, which is the difference between the spot and futures price. The futures market prices were supported by the need for basis convergence and the narrowing of the gap between spot prices and futures. This was despite spot prices falling faster than futures earlier in this month. Coke and other steelmaking materials, such as coking coal, fell by 3.48% and 2.68 percent, respectively. The benchmark steel prices on the Shanghai Futures Exchange are mixed. The Shanghai Futures Exchange saw a mixed performance in steel benchmarks. Rebar gained 0.26%; hot-rolled coil remained unchanged; wire rod increased by 0.3% while stainless steel fell 0.24%. ($1 = 7,1075 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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The Information reports that Databricks is in discussions to raise capital valued at more than $130 billion.
The Information reported Monday that Databricks, a data analytics company, is in discussions to raise money at a valuation exceeding $130 billion. This is about 30% more than the last round of financing two months ago. The company refused to comment on the article. The report stated that Databricks had not signed any term sheets with investment firms. Could not confirm immediately the report. In September, the San Francisco company closed a $1 billion funding round, which valued it at 100 billion dollars, making it the most valuable private company in the world. Databricks announced at the time that it was on course to reach $4 billion in annualized revenues, driven by a booming demand for their artificial intelligence products. The proceeds would be used to accelerate the company's AI strategy, expand its products, launch a operational database category, and pursue AI research and acquisitions. Databricks was founded in 2013 and offers a platform to help users ingest data, analyze it, and create AI applications. The company is viewed by many as the leading candidate for going public, and it has received many investor inquiries. Databricks serves about 15,000 clients, including Block, a payments company, Shell, and Rivan, a maker of electric vehicles.
Asian markets fall as investors worry about tech valuations
The Asian stock market fell to a one-month low on Tuesday, with the most selling taking place in Japan and South Korea. Earnings from chipmaker Nvidia are expected later this week and will be a test of valuations in the entire sector.
Bitcoin, the mood-barometer, is now below $90,000. This is the first time it has been under that level in seven months. Japan's Nikkei was on track to have its biggest one-day drop since April, with a decline of 3%. FTSE futures and European futures both fell more than 1%.
Tareck Horchani is the head of prime brokerage at Maybank Securities, Singapore.
He said that it was less about a catalyst than about a combination of positioning fatigue, valuation sensitivities, and the growing feeling that a pause is needed in this rally.
MSCI's broadest Asia-Pacific share index outside Japan fell by 1.8%, to its lowest since mid-October. South Korea's KOSPI fell 3.3%, Australia S&P/ASX200 dropped almost 2%, and Hong Kong Hang Seng Index shed 1.67%.
The stock market weakness in Asia was a reflection of the extended selloff that occurred overnight on Wall Street, as markets prepared for an influx of economic data.
November has seen a greater level of volatility in global equity markets. "Unlike October, major indices are stalling, and have not been able to reach new record highs," Besa deda, chief economic advisor at William Buck in Sydney, said.
NVIDIA ANTICIPATED
Investors are eagerly awaiting the quarterly earnings of Nvidia on Wednesday, as they look for any signs that a sector has weakened in recent months.
BNP Paribas' basket of Japan’s top AI-related stock tracked during Tuesday’s session fell by 4.7%, bringing its monthly decline from the end of October up to around 15%. The basket had risen 130% between the beginning of the year and October.
Jason Lui is the head of APAC Equity and Derivative Strategy at BNP Paribas.
Investors will be more selective in their investments as they analyze the spending and its sustainability.
On the foreign exchange markets, the safe havens like the dollar, the yen and the Swiss franc are bought. The Swiss Franc was only 0.80 dollars strong. The dollar index was unchanged at 99.5.
The yen rose by about 0.15 percent to 155 dollars, a relief for Japanese officials who had been vocally protesting the yen's weakness.
JGBs SLIDE
On worries over Prime Minister Takaichi’s ballooning budget plans, Japanese government bonds have also fallen, with some long-end rates reaching record highs.
The first meeting between Takaichi and Bank of Japan Governor Kazuo Ueda since the new leader's inauguration last month was closely monitored at 0630 GMT.
Ueda hinted at the possibility of an interest rate increase as early as next month. Takaichi, and her finance Minister, Satsuki Catayama, both want rates to stay low until inflation reaches the BOJ's target of 2%.
"My expectation would be that another rate increase will be delayed until 2026." The BOJ could wait until the first quarter to see the results of wage negotiations. It is a conservative organization and they can continue to wait," said Tai Hui. Chief market strategist at JPMorgan Asset Management for Asia.
Brent crude futures fell 0.67% during the Asian session, to $63.77 per barrel.
Bitcoin fell almost 2%, dropping below $90,000. This is a drop of about 30% since its peak. (Editing by Shri Navaratnam & Christian Schmollinger).
(source: Reuters)