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Citi expects Brent crude to reach $60 by the end of the year as OPEC+ ramps production.
Citi analysts forecast Brent crude oil price to fall to $60 per barrel by the end of this year and average $62 between the second quarter and fourth quarters in 2026. They cited OPEC+ production increase and China's stockpiling. After OPEC+ announced that it would unwind an extra 1.6 million barrels of oil per day (mb/d), the bank revised its outlook for global liquids. This will begin in October 2025. Citi estimated that this could result in stock builds of up to 1.1 million barrels per day in 2025, and 2.1 million in 2026. This would add slack in an already loose global supply. Citi estimates that global liquids inventories will reach 10.9 billion barrels by the end of 2026. This is equivalent to 103 full days' supply. Citi attributed a 30% chance that Brent prices would fall below $60 per barrel - potentially as low as $50 - due to weaker global demand and faster growth of non OPEC supply. The bullish scenario with a probability of 10% could push Brent above $75 due to increased geopolitical instability. The global oil demand is projected to increase by 0.7 million barrels per day in 2025, and by 1 million in 2026. However, trade disputes may reduce diesel consumption by up to 0.3 million barrels per day. Citi has reaffirmed that it will target Brent at $60 per barrel for the next six to twelve months. Brent crude futures traded at $66.93 per barrel at 1024 GMT, while U.S. West Texas intermediate futures traded at $62.92. (Reporting from Anmol Choubey, Bengaluru. Editing by Kirby Donovan.
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Copper prices rise with signs of improved demand from China
Prices of copper rose on Friday, as signs of improved demand came from China's top metals consumer. Buyers are building up their inventories ahead of the long holiday. The benchmark three-month copper price on the London Metal Exchange rose 0.4% to $9,975.50 per tonne by 0953 GMT. Metal is down 2% from its 15-month-high of $10,192.50 on Monday as traders took profits after the U.S. Federal Reserve cut rates on Wednesday. Yangshan Copper Premium The price of copper, which is a measure of the demand for imported copper into China, increased 1.8% on Friday to $57 per ton. Consumers in China buy copper to restock in advance of the holiday. This year's public holiday runs from 1 October to 8 October and is usually a time when activity is muted. Citi Research said that copper is expected to trade between $9.500 and $10.500 per ton during the fourth quarter, before rising to $12,000 by 2026. This is due to the possibility of a falling dollar and a rise in metal production not being enough to offset the higher demand. The global market will be in deficit by 308,000 tons next year, compared to this year's surplus of 63,000 tons. Aluminium, among other LME metals rose 0.3% to $2692. The premium for the cash contract of aluminium over the three-month contract increased to $16 per ton on Tuesday. This was the highest level since March. Last time, the premium was $4 per ton. Citi reported that "physical market conditions" (for aluminum) are broadly balanced at a global scale. Citi also predicted a fourth-quarter average price of $2,650. LME zinc fell by 0.6%, to $2.897.50 per ton. Lead dropped 0.2%, to $2.002.50. Tin gained 0.4%, to $33,850. Nickel added 0.2%, to $15,295. (Reporting and editing by Harikrishnan Nair; Additional reporting by Dylan Duan, Amy Lv and Amy Lv)
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Washington Post reports that US lawmakers are planning to introduce a bipartisan bill to eliminate coffee tariffs.
U.S. The Washington Post, citing an excerpt from the draft legislation, reported that Representatives Don Bacon, Ro Khanna, and others plan to introduce bipartisan legislation which would exempt coffee product tariffs after Jan. 19,2025. Report said that the exemption would be applicable to decaffeinated and roasted coffees as well as husks and skins of coffee and other drinks and substitutes containing caffeine. According to the report, Republican Bacon and Khanna (a Democrat) said that they chose coffee as a way to save money for Americans on a staple. Why are we taxing American citizens for something we don't grow? Bacon told the paper that it didn't make any sense. The White House, Bacon and Khanna did not respond immediately to comments. The price of coffee in the United States has been high ever since the Trump Administration imposed a 50% tariff at the end July on Brazilian imports, which included green coffee. The Intercontinental Exchange, New York, has seen the prices of arabica coffee, a milder variety used by coffee chains like Starbucks and Dunkin' Donuts have risen around 50%. Brazil used to provide a third all of the coffee consumed in the U.S. but since tariffs were implemented, shipments have dried out. (Reporting by Anusha Shah in Bengaluru; editing by Philippa Fletcher)
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European stocks rise as investors remain optimistic about rate cuts
The European stock market made a small gain on Friday. It is on track to make a modest advance for the week after the U.S. Federal Reserve cut rates. For the first time in December, the U.S. Federal Reserve lowered interest rates on Wednesday by a quarter percentage point. Norway and Canada cut rates as well. Wall Street closed Thursday at a new record, but in Asian trading Nikkei fell from its previous record after the Bank of Japan announced a further winding down of its stimulus policy. The MSCI World Equity Index was not much changed at 0923 GMT. The pan-European STOXX 600 index was up by 0.1% and London's FTSE 100 index was flat. Investors bet that the central bank's rate reductions will further boost stock prices. Amelie Derambure is the senior multi-assets portfolio manager at Amundi. She said: "For the coming weeks, we will continue to maintain a risk-on approach in our portfolios. We continue to overweight equities." Our stance is the market will continue to rise in the next few weeks with some volatility. The Fed did not endorse market expectations of a string of rate reductions, instead focusing on a meeting by meeting, data-dependent, approach. Analysts said that the Fed's tone and the diverse views of the central bank disappointed some investors who had hoped for a rapid change to lower interest rates. The markets are waiting to hear any news about a phone call between Chinese president Xi Jinping, and U.S. president Donald Trump. It is expected that the two will discuss the TikTok agreement and tariffs. After data revealed a rise in borrowing by the public sector, the British pound dropped 0.4% to $1.3504 and UK gilt yields increased. The Bank of England kept its rates unchanged on Thursday, but it slowed down the rate at which it unloaded the government bonds that it had purchased during previous crises. The U.S. Dollar index, which was up 0.2% to 97.509, is a little higher. The pair is now trading at 147.82. The yields on German 10-year government bonds rose to 2.7361% . Während shorter-dated bonds benefited from the expectation of rate reductions, longer-dated yields rose on investor concerns about government finances. The Bank for International Settlements (BIS) warned this week about the disconnect between record global share prices and signals on the bond markets that investors are worried about government debt. The yield on the 10-year U.S. Treasury was 4.1255%. Oil prices fell as traders' concerns about fuel demand overshadowed the usual boost to oil prices that would come from a U.S. interest rate cut. Gold rose 0.4% to $3,656.4 and is on track for its fifth consecutive week of gains.
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Open Mineral is investigated by Switzerland for alleged sanctions against Russian gold deals
Two sources familiar with the matter have confirmed that Open Mineral, a Swiss metal trader, is under investigation by both the State Secretariat for Economic Affairs in Switzerland (SECO) as well as Zug Police for alleged dealings involving sanctioned Russian Gold. After the Russian invasion of Ukraine in 2022, Switzerland imposed sanctions on Russian gold in August 2022. These sanctions included gold. "We fully cooperate with the authorities, and we welcome this new development in the hope that it will accelerate the resolution." Open Mineral responded to a comment request by saying that business is continuing as usual. A spokesperson for SECO said that SECO and Zug Police conducted a search of a home in the canton Zug on September 11, The measure was taken in relation to an administrative criminal proceeding that SECO is currently conducting. "The proceeding targets two people as well as unknown persons," SECO media spokesperson stated. SECO refused to identify the two individuals, and said that the search had nothing to do with the investigation of Open Mineral. SECO stated that the investigation was based on potential violations of Article 9 Federal Act on Implementation of Sanctions International... in connection with the Ordinance on Measures Related to the Situation in Ukraine. The criminal law provides a legal basis to prosecute individuals or entities who violate Swiss sanctions laws, whether intentionally or negligently. SECO stated that it would not comment further on the current proceedings. All accused persons are presumed to be innocent until the legal proceedings are concluded.
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Optus error causes three deaths in Australia
Optus, Australia's second largest telecommunications company, has suffered a technical malfunction that disrupted the emergency call system. Three people died as a result. Stephen Rue, CEO of Telstra, said that the failure occurred on Thursday during a network update, potentially impacting 600 customers from South Australia, Western Australia, as well as the Northern Territory. He said that welfare checks found three dead people in homes who had tried to call triple zero ("000") for an emergency. The checks are still being conducted. Rue apologized to customers who were unable to connect to emergency services at a time when they most needed them. I offer my heartfelt and sincere condolences, to the family and friends of those who have passed. Sorry for your loss. It is unacceptable. "We have let you down." Rue did not know the exact duration of the failure. He said that Optus owned by Singapore Telecommunications had corrected the problem, was conducting an extensive investigation, and would publish the results once they were completed. The incident occurred less than a month after Optus received a fine of A$12,000,000 ($7.9million) from regulators for failing provide emergency call service to thousands of people during a national outage in the year 2023. Optus was also hit by a cyber-attack in 2022, which affected data for 9.5 million Australians. In 2023, a widespread outage caused Kelly Bayer Rosmarin to resign as CEO. Rue assumed the leadership of Optus in November 2024.
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Solar price rises on Monday due to a slump in supply
On Monday, a drop in solar energy generation in Germany will likely offset an increase in wind power output and cause baseload electricity prices to rise. LSEG data shows that the German and French baseload power contracts TRDEBD3,TRFRBD3 had not been traded by 817 GMT Friday. LSEG data revealed that the day-ahead contracts were closed at 88.9 euro/MWh on Thursday and at 58.1 euro/MWh. Wiulan He is an LSEG analyst. He said that a decrease in solar production is expected to increase residual load on Monday. He added that Germany will be a net buyer throughout the day. LSEG data shows that German wind power production is projected to increase by 1.1 gigawatts to 17.8 GW Monday. French wind power is forecast to grow by 6.2 GW from 9.8 GW. The data indicated that solar power in Germany is expected to drop sharply Monday. It will fall from 8.2 GW down to 5.6GW. On Monday, power consumption in Germany will fall by 540 Megawatts (MW), to 53.2 GW. Demand in France should remain stable at 43.1 GW. The French nuclear capacity remained at 75%. German power contract for the year ahead TRDEBYZ6 The price of a megawatt-hour (MWh) in France has dropped by 0.4%, to 87.75 Euros ($103.16). TRFRBYZ6 The market had not opened trading on Friday after closing Thursday at 59.75 Euros/MWh. Yesterday, the German power contracts were backed by several parties. The wind forecasts were continually lowered for the first of October. In their morning report, Mind Energy analysts noted that stronger gas prices and carbon prices also contributed to the increase. The European Carbon Market CFI2Zc1 The benchmark contract dropped 0.7% to 77.28 Euros per metric ton.
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Documents show that Singapore is reviewing a short seller claim against India’s Vedanta
Documents viewed show that the Singapore Police Force has been reviewing a complaint filed by Viceroy Research, a short seller who alleged that Vedanta Ltd, a natural resources conglomerate had improperly funded Vedanta's 2024 dividend. Viceroy's accusations were "baseless" according to Vedanta Ltd, which said it had paid out all dividends in compliance with the applicable laws. The company stated that "we maintain that the allegations contained in the dubious reports of the short seller are malicious and uninformed and we reject them unequivocally." The statement added that there was no SPF investigation in progress and the Singapore Police had not contacted it. Vedanta had previously denied separate allegations made by Viceroy back in July. When contacted, the SPF refused to comment. Accusations of boosted divison Vedanta Limited, based in India, is a specialist in exploration, extraction, and processing of mineral and oil. Viceroy, a U.S. based company, claimed in a letter to the SPF dated August 7, seen by that the company had boosted its dividend using 900 million dollars of Oaktree Capital Management's loan. Viceroy stated that Vedanta, valued at approximately $20 billion, had used accounting and loan tricks to make their reserves appear larger on paper, and to pay out investors without any real cash earnings backing them up. Later, it repaid the debt and reversed write offs via entities domiciled in Singapore. Viceroy said that it drew its conclusions primarily from public reports, forensic analysis of Vedanta Ltd’s filings and visits to the assets. In an email that was seen by Viceroy, the SPF responded to Viceroy's complaints, giving it a number as a reference, indicating they were reviewing the issue. Vedanta Limited is 56% owned by Vedanta Resource, a UK-based company. The rest of the shares are held by institutional investors. Viceroy published in July a report stating that it had taken a position against Vedanta's debt, claiming the British company was "systematically draining its Indian unit", which Vedanta Ltd denied. Vedanta Ltd also claimed that its dividend policy served the parent's financial needs and not its own cash flows. It added that billions in disputed expenditures were hidden from its balance sheet. The Indian company's spokesperson said that the report contained "selective misinformation and baseless accusations." Vedanta Ltd is under pressure after the Indian government refused to approve a plan to demerge into four separate entities, launched by chairman Anil Agarwal 2023. This was after a failed attempt three years ago to take the group privately. Vedanta Resources announced last year that it would be focusing on cutting down its debt, with a goal of reducing net debt by $1.2 billion, to $11.1 billion, in fiscal 2025. (Reporting and editing by Veronica Brown, Joe Bavier, and Florence Tan)
Gold gains for the 5th week in a row as attention turns to US policy after Fed action
The gold price edged up on Friday as investors awaited more signals about the U.S. economic outlook.
As of 0817 GMT, spot gold was up by 0.2% to $3,650.89 an ounce. Bullion has gained 0.2% this week.
U.S. Gold Futures for December Delivery rose by 0.1% to $3683.40.
Han Tan, Chief Market Analyst at Nemo.money, said: "The Fed's policy outlook is the main driving force behind bullion buggers, even though the precious metals are receiving tremendous support due to central bank purchases and the demand for safe havens. Any dips below 3,600 will be brief."
The Fed cut the key interest rate on Wednesday by 25 basis points and opened the way for further easing. However, it temperated its message with cautions about sticky inflation. This raised doubts over the pace of future ease.
Fed Chair Jerome Powell described the policy as a risk management cut in response the weakening of the labour market. He said that the central bank is in a situation where it has to "meet-by-meeting" about the rate outlook.
According to CME Group’s FedWatch tool, traders are pricing in 92% of another 25-bp reduction at the Fed’s October meeting.
Nitesh Sha, commodity strategist at WisdomTree, said: "Key factors that drive gold prices are the continued depreciation of the dollar. Year to date the trend has been strong and we expect it to continue."
We expect gold prices next year to trade around $4,300.
The price of non-yielding gold, which is known to do well in low interest rate environments, reached a new record on Wednesday, reaching $3,707.40. It has increased by 39% so far this year.
The physical gold premiums in India reached a 10-month-high this week, as investors continued to buy bullion in anticipation for further gains despite record prices in the run up to the festive season.
Palladium fell 0.4% to $1,146.43, while spot silver increased 0.8% to 42.12 cents per ounce. Platinum also rose 0.2% to 1,386.65. All three metals are headed for a weekly loss. (Reporting and editing by Anmol Chaubey, Bengaluru)
(source: Reuters)