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India's ONGC plans 13 million bbl of national strategic oil reserves
India's Oil?and?Natural?Gas Corp. will build a 1,75 million metric tons (about 13,000,000 barrels) strategic petroleum reserve at Mangalore, in southern India. The company announced this in a late-night stock exchange filing on Thursday. India, which is the third largest oil consumer and importer in the world, was severely affected by the blockade imposed on the Strait of Hormuz - during the Iran War. Around a fifth (25%) of all energy in the world passes through this?waterway. India has increased its energy cooperation, with countries such as the United Arab Emirates, Japan and others, in order to strengthen its emergency stockpile. In a filing, ONGC, India’s largest oil exploration company, said it would ask the federal government for permission to use the storage facility in the commercial interest of the country. New Delhi allows the commercial use of a portion of its strategic storage located at three locations in southern India - Mangalore Padur and Vizag. This storage can store up to 5,33 MT crude. The Indian Strategic Petroleum Reserves Ltd., a government-owned company, manages these storage facilities. ONGC did not specify the cost or time required to complete the new SPR facility in Mangalore. India's strategic?stockpiles represent a small fraction of the country's 5.2 million barrels a day refining capability. Mangalore Refinery and Petrochemicals Ltd is a subsidiary of ONGC and operates a refinery with a capacity of 300,000 bpd in Mangalore. It has already leased the half of 1.5 MT of?Mangalore spr, and the remaining capacity is leased by Abu Dhabi National Oil Co. from the United Arab Emirates. ADNOC, during the visit of Indian Prime Minister Narendra Modi to the UAE in early this year, announced plans to "increase crude storage in India up to 30,000,000 barrels." ADNOC announced that it would also explore the possibility of storing crude oil at Fujairah, as part of India's strategic reserves. India is also planning to build a strategic storage facility of about 4 MT at Chandikhol, in eastern Odisha. A new 2.5 MT facility will be built at Padur, in southern India. (Reporting and editing by Rashmi aich and Susan Fenton; Nidhi verma)
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Aluminum falls during EGA alumina startup, but still on track for weekly increase
Aluminium prices dropped sharply on Friday after Emirates Global Aluminium announced that it had restarted its United Arab Emirates refinery following a '3-1/2 month outage. This is a further sign that metal production within the Gulf region will soon be returning. EGA's Al Taweelah refining plant in the industrial zone housing the plant halted production of alumina (a white substance that is used to produce aluminium) on March 28, following Iranian attacks. The strikes forced the closure of the Al?Taweelah smelter which had been slowly restoring production from May 26. Alumina accounts for approximately?40% in smelters production costs. After EGA's announcement, benchmark three-month aluminum on the London Metal Exchange dropped as much as 1.5 %?to $3153.50 per metric ton and was trading at $3154 as of 830 GMT. Metal, which is used in packaging and transport, is on track to end the week with a 2.1% gain, after five consecutive weekly losses. This comes as the renewed attacks from the U.S. Al Taweelah refinedry produced 2.4 millions tons of alumina by 2025, which met 46% EGA's requirements, according to a firm statement. The firm also said that they expected to ramp up to 50% capacity within days and have the capability to restore production to full levels by year-end. The?prospects of EGA's aluminium and alumina flowing through the Strait of Hormuz and to export markets are uncertain, and LME aluminum inventories The lowest level since September 2022. The cash LME Aluminium contract was trading at $7.50 per ton over the forward three-month contract The remained in its reversed position for a second consecutive day, as a sign that physical availability will be tighter in the near future. Copper edged up by?0.1% at $13,501 per ton, and was on track for a weekly increase of 0.9%. Nickel fell 0.4%, to $16,520. Tin dropped 0.5%, to $53,385; and zinc fell 0.4%, to $3,611. (Reporting and editing by Ronojoy Mazumdar, Sonia Cheema, and Solomon Cefai)
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Weekly gain in oil heads as Middle East supply risk persists
The oil price fell on 'Friday, but remained on course for a weekly gain as renewed U.S. - Iran fighting disrupted shipping through the Strait of Hormuz. This stoked concerns about supply disruptions. Brent futures fell 68 cents or 0.9% to $75.62 per barrel at 0817 GMT. U.S. West Texas Intermediate crude (WTI), which is a blend of U.S. and Canadian crudes, fell 64 cents or 0.9% to $71.44. Brent was expected to gain about 5% this week and WTI would increase by about 4%. Vandana Hari, an analyst at Vanda Insights who provides oil market analyses, said that although prices have fallen from their midweek highs there is still "substantial" risk as Hormuz Transits are now back to a standstill. On Thursday, the Iranian military launched attacks against U.S. military facilities in Gulf states?after U.S. airstrikes on Iran's eastern and southern provinces. This further strained a fragile ceasefire. Iranian media reported that there were multiple explosions in southern Iran. Bushehr, one of Iran's nuclear power plants, was also in the area. According to the International Energy Agency, the recent escalation of hostilities between Iran and the United States could change its forecast for a significant surplus on the oil market next year. These developments have also delayed the full reopening of Strait of Hormuz. The Strait of Hormuz carried around 20% of global oil and gas supply daily before the beginning of the war, on February 28. According to UBS analyst Giovanni Staunovo, the lack of new U.S. attacks on Iran over night is likely to be weighing on the oil?prices. However, a decline in the flow of oil through the Strait of Hormuz limits the 'downside. Ship-tracking data revealed that tanker traffic in the strait had slowed to a standstill on Thursday as owners weighed the risks after Iran struck a Qatari LNG vessel leaving the waterway near Oman, triggering the latest strikes. Donald Trump, the U.S. president, said that on Wednesday he didn't think that war would resume and that "anything" that happened was going to be resolved very quickly. "Despite 'the U.S. ramping-up attacks on military.sites in Iran, market drew a little reassurance from Trump administration's refusal to target Iranian energy infrastructure", said ANZ commodities strategist Daniel Hynes.
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The IEA warns that escalation between the US and Iran could threaten oil surpluses in 2027.
The International Energy Agency said on Friday that the recent escalation of hostilities between the U.S., Iran, and other countries could change its forecast of an oil surplus next year. Global supply increased in June after the Strait of Hormuz was reopened, but it still lagged behind pre-war levels. Last month, global oil markets were given some relief as a peace deal between the U.S.A. and Iran allowed the opening of Strait of Hormuz. The closure of this strait had effectively cut off up to 14 million barrels of crude per day during the height of the biggest oil supply crisis ever. The IEA reported that global oil supplies rose by 4.1 millions bpd during June, but remained 9,4 million bpd below the pre-war level. The agency expects that supply will increase by?7.5m bpd in the next year?after a contraction of 3.7m bpd this year?but this is dependent on improved transits through Hormuz. It said that an escalation of hostilities between 7-8 July could cloud the outlook, and upend the forecast which sees the oil market turning to a surplus in the next year. The IEA forecasts for 2027 indicate that'supply will exceed demand by 4,62 million bpd in the next year, from an 860,000 bpd deficit last year. The Paris-based agency, which advises industrialised countries, predicts that global oil demand will?fall by 1 million barrels per day this year before rising to 2 million in 2027. The peak summer fuel demand season is expected to lift consumption by 8 million bpd compared to the low point in May at the height of the crisis. (Reporting and editing by Jan Harvey; London, Robert Harvey).
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Gold prices to drop this week as Gulf attack reinforces rate-hike betting
Gold?edged down on Friday - and was on course for a 'weekly drop, on fears that escalating U.S. - Iran tensions would fuel inflation. This could keep the Federal Reserve hawkish in its monetary policy. Gold spot fell by 0.2%, to $4.113.02 an ounce at 0735 GMT. It was on track for a weekly drop of 1.5%. U.S. Gold Futures for August?delivery fell 0.4% to $4121.90. Tim Waterer is the chief analyst at KCM Trade. He said that gold was in consolidation mode after yesterday's gains. Traders were hesitant to commit to further upward movement due to the uncertainty surrounding U.S.Iran relations. The oil prices are on course for a gain of a week as U.S. and Iran continue to trade strikes. Iranian forces have launched attacks against U.S. military infrastructure in Gulf states. The Fed is likely to raise rates this year as inflation fears have been fueled by the latest round of strikes. According to CME's FedWatch, the markets are now pricing in 63% of a rate hike for September, up from 54% just a week ago. Gold is often seen as an asset that can be used to hedge against inflation, but it becomes less attractive as a yieldless asset when interest rates are high. I expect gold to continue attracting buyers during dips, as long as oil remains at current levels. Waterer stated that a sharp rise in oil prices could reignite inflation and interest rate concerns, which would hurt gold. The minutes of the Fed meeting in June, which were released earlier this week, revealed that policymakers are increasingly concerned about inflation. On Thursday, HSBC cut its average gold price predictions for 2026-2027. The reason given was a shift to a more hawkish stance in the U.S. Expectations about monetary policy and a stronger dollar. Silver spot rose 0.2%?to $60.10 an ounce. Platinum gained 1.2% at $1,629.03, and palladium increased 2.2% at $1,274.34. All three metals are on course for weekly losses. (Reporting and editing by Sherry Jacobi-Phillips, Subhranshu S Ahu and Swati verma from Bengaluru).
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IEA's Russian crude oil production forecasts are cut after Ukraine's attacks
According to the International Energy Agency, it has reduced its projections for Russian oil production due to Ukrainian attacks on the country’s energy infrastructure. In recent months, Ukraine increased 'drone strikes' on energy facilities such as oil refineries in an effort to stop Moscow from waging war. The Paris-based agency stated that "continued strikes against refineries, storage and transport facilities have weakened the production outlook. We have therefore cut our Russian supply forecast for this year and the next by 85,000 barrels a day and 150,000 bpd, respectively, to an average of 8.8 million bpd during the forecast period." The IEA predicts that oil production from Russia, which is the third largest producer in the world, will?reach 8,9 million bpd by this year, and 8.8 millions bpd by 2027. This is down from 9,2 million bpd?in?2025. The outlook for this year was reduced by?85,000 and?150,000 bpd, respectively. The agency reported that Russia's crude oil production in June increased by 120,000 bpd compared to May, reaching 8.86 million bpd. This is 900,000 bpd less than the quota established by the OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies. In recent months, the attacks on refineries also resulted in an increase in?Russian crude oil exports. According to industry sources, shipments out of Russia's western port reached a record-high?in June. They are expected maintain this level in July. The data from the sources showed that exports?from the Baltic ports of Primorsk and Ust-Luga as well as the Black Sea port Novorossiysk reached almost 3 million bpd?in June. The IEA estimated that Russia's?total oil exports were 5.8 million bpd in June, an increase of 620,000 bpd over May. Last month, oil?products exported fell by?230,000 from May to a total of?1.91million bpd. In order to combat domestic fuel shortages, Russia has introduced a ban on diesel exports this week. (Reporting and Editing by David Goodman).
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Copper stablises in the face of Iran's escalation fears
Copper prices were flat on Friday as fears faded of an economic hit and a drop in metal demand due to a spate of tit for tat attacks between the U.S.?and Iran. The benchmark three-month copper price on the London Metal Exchange was?largely steady, with a drop of only 0.01% at $13,487.5 per metric ton as of 0700 GMT. The red metal prices are now close to the levels they were at the beginning of the week. This is the culmination of a few volatile days, during which fears about a new round in the conflict between the U.S. Prices were affected by concerns about a new round of fighting between the?U.S. The Shanghai Futures Exchange's most traded copper contract rose by?1.38%, to 103 710 yuan per ton ($15 298.72). The dollar is on course to drop for a third consecutive day. This will support copper prices, as buyers who use other currencies can buy it at a lower price. John Williams, the president of the New York Federal Reserve, on Thursday downplayed inflationary effects from the latest Middle East flare-up. Copper, an industrial metal that is dependent on economic growth and is heavily influenced by inflation and interest rates, has a high price. Interest rates that are higher dampen the demand for industrial metals like copper by reducing economic activity. Aluminium, however, was on track to have its best week ever since the beginning of April. It gained 3.33%. On the LME, it reversed its early gains and fell 0.11%. The SHFE saw a gain of 0.26%. Aluminium has seen a'supportive' slide in stocks, and a forecast of a deficit overall this year. On Thursday, the LME Cash-to-Three-Month Aluminium Spread edged into backwardation, signaling a tighter physical availability in the near term. LME zinc fell 0.21% after rising more than 3% Thursday due to a reported fire in a South Korean smelter. The SHFE price rose?1.06%. Lead was stable on the LME, while nickel rose 0.08% and tin fell 0.12%. On the SHFE, lead fell 0.34%. Nickel gained 0.95%. Tin rose 1.85%. $1 = 6.7790 Chinese Yuan Renminbi (Reporting and editing by Ronojoy Mazumdar).
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Australian shares snap four day decline as banks, miners and miners rise
After a positive session on Wall Street on Friday, Australian shares ended a four-day loss streak. This was despite a resurgence in the Middle East conflict raising supply concerns. The benchmark S&P/ASX 200 Index ended the week 0.5% higher, at 8,806.00. The benchmark index lost 0.4% during the week. Wall Street's overnight performance was boosted by Micron Technology’s plans to invest over $250 billion in the U.S. until 2035. Iran launched attacks against U.S. military installations in Gulf States on Thursday, raising fears of a further disruption of supply at the Strait of Hormuz. Tim 'Waterer, KCM Trade chief market analyst said: "Today’s positive price movement on the benchmark indicates investors are still leaning towards?optimism...A better night on Wall Street improved sentiment." BHP and Rio Tinto, two of the world's largest mining companies, are due to report earnings next week. William Taylor, ETF Shares COO and Portfolio Manager, said: "Given the combined weight of the index, the banks and major miners are likely to attract the majority of investor attention." BHP Group posted its best day for nearly a week, gaining 2.5%. The mining index gained 2.5% and ended four consecutive sessions of losses. The banks' margins improved by 0.6%, the best since the week ended May 22. This was due to a rate environment that has been higher for longer. All "Big Four' banks were in the black. Gold stocks followed suit and rose 2.7%. This was the best day for the index in a whole week. Gold miner Genesis Minerals gained 3.9%. Energy stocks, which had been on a roll, dropped by 0.2% but still posted their best week for nearly four months. The New Zealand markets were closed for the?public holiday on Friday. (Reporting by Aamir Shaik Khalid in Bengaluru; Editing by Janane Venkatraman) |1|For more information on DIARIES & DATA: U.S. earnings diary Wall Street Week Ahead Global Economy Week Ahead ................................................................ For latest top breaking news across all markets |1|
The IEA warns that escalation between the US and Iran could threaten oil surpluses in 2027.
The International Energy Agency said that the recent escalation of hostilities between the U.S., and 'Iran, could change its 'forecast of an 'important oi l market surplus next year.
The global oil market received some relief last'month, as a peace deal between the U.S.A. and the 'Iran opened the Strait. Its closure had effectively cut off 'as much as 14 million barrels of crude oil per day during the height of the biggest oil supply crisis ever.
The agency reported that global oil production rose by 4.1 mbpd in June but was still 9.4 mbpd lower than pre-war levels. The agency expects that supply will increase by?7.5million bpd in the next year. However, this depends on better?Hormuz Transits.
The report said that an escalation of?hostilities in London on 7/8 July could cloud the outlook, and could "upend" the forecast which?sees a market turning?towards a surplus by next year. (Reporting and editing by Jan Harvey; Robert Harvey, London)
(source: Reuters)