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The US Strategic Petroleum Reserve has seen its lowest oil stocks since 1983
The?stocks of crude oil in the United States have fallen to their lowest level since June 1983. The Strategic Petroleum Reserve dropped to 331.2 million 'barrels' last week. This is the lowest level since June 1983, according data from the Department of Energy. Supplies continued to tighten as a result of the U.S. - Iran war. The government's emergency stock fell by 9.05?barrels. This is the third-largest draw ever recorded. The drawdowns were a part of an agreement between the U.S. and Canada to release 172 millions barrels from the facility in order to lower fuel prices. U.S. crude oil stocks have declined rapidly in recent weeks as a result of strong demand for American oil from exporters and refiners. Since the beginning of the war at the end February, U.S. overall inventories have dropped by 96.2 millions barrels. They are now the lowest they've been since 1985. Cushing is the main oil storage hub in Oklahoma, and also the price point for U.S. West Texas Intermediate crude oil futures have dipped to a low of?around 20 million barrels. This is considered a operational low for the tank storage farm. The latest SPR 'loans' require companies to borrow oil and return it in its original volume, plus a?premium, which is?extra oil. The Department of Energy says the system will stabilize markets without costing U.S. tax payers. Reporting by Arathy S. Somasekhar, Houston; editing by David Gregorio
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Oil prices fall as US-Iran optimism about peace lowers gold prices
Gold prices rose on Monday as the U.S. and Iran peace talks impacted oil prices. This helped to ease inflation fears. Gold spot rose 0.4%, to $4174.90 an ounce at 12:12 pm. ET (1612 GMT). On Friday, prices reached their lowest level since June 11. U.S. Gold Futures for August Delivery fell?1.2%, to $4193.90 an ounce. Ole Hansen, analyst at Saxo Bank, said that energy prices would remain the key driver of precious metals in the short term. Hansen said that the "bumps" in the talks between the U.S. and Iran are still pointing to a deal which would essentially add new barrels of oil into the market, putting pressure on the crude prices. JD 'Vance, the U.S. vice president, said that talks with Iranian officials in Switzerland laid "a good foundation" for an eventual peace deal despite tensions surrounding the Strait of Hormuz. Brent crude futures dropped more than 3% following the announcement. According to the CME FedWatch Tool, traders see a 90% probability of a rate increase in December. This is up from a 61% chance before the Federal Reserve meeting last week. Nine out of 19 Fed policymakers think they'll need to increase the policy rate this year. Gold, despite its reputation as an inflation hedge, tends to lose appeal when interest rates increase, as it becomes less appealing relative to other investments that pay interest. Bank of America stated in a note published on Friday that the $6,000 per ounce gold target is 'unlikely', since the market would have to price rate increases into their prices to reach such levels. The original premise that underpinned the bank's bullish gold call -- an unorthodox U.S. Macro Policy -- remains intact, according to the statement. Silver spot rose by 0.5%, to $65.24 an ounce. Platinum gained 0.1%, to $1,666.45, and palladium fell 0.5%, to $1,251.92. (Reporting and editing by Leroy Leo, Vijay Kishore and Ashitha Shivprasad from Bengaluru)
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Oil prices fall as worries about rates offset optimism over Iran talks
Oil prices dropped on Monday as expectations of higher interest rates pushed U.S. Treasury Yields up. JD Vance, the U.S. vice president in Switzerland, said that Iran had agreed to allow inspectors of nuclear technology into the country. The talks could begin as early as this week. Officials from Qatar have said that progress has been made in developing a roadmap for a final agreement to be reached within 60 days. Wall Street's benchmark S&P 500 index and the Nasdaq fell on the day. This was due to the consumer discretionary and communication services stocks. The Dow rose. The Dow Jones Industrial Average rose 0.23%. The S&P 500 dropped 0.37%. And the Nasdaq Composite fell by 1.09%. The STOXX 600 Index in Europe was up by 0.56%. MSCI's global index of stocks rose by 0.02%. The apparent progress of the peace talks has boosted Asian stocks overnight. MSCI's broadest Asia-Pacific share index outside Japan closed up by 0.88%. Gerry Sparrow is the chief investment officer at Sparrow Capital Management. He said that markets are influenced by Fed's hawkish view and reduced expectations of Kevin Warsh, new Fed chair, reducing?rates. Sparrow stated that the market was surprised by the action of the new Fed Chair, as they had expected him to be more lenient on interest rates. Federal Reserve held interest rates at the same level on Wednesday, but policymakers are expecting a rise in borrowing costs this year due to growing concerns over inflation that is above the 2% target set by U.S. Central Bank. The yield on the benchmark U.S. 10 year notes increased by 4.39 basis points, to?4.495%. Brent crude futures fell by 3.8%, to $77.44 per barrel. This is far below the peak price of $126.41 in May. Sparrow stated that "the progress in the peace talks was good, but the only disappointment was the fact that the new Fed wasn't more accommodating during its latest announcement." UK POUND RISE AFTER STARMER?RESIGNS After Keir Starmer's resignation was announced, the pound and UK bonds rose. This paved the way for Britain to elect its seventh leader in ten years. The 10-year gilt yield dropped 3.37 basis points, to 4.808%. Andy Burnham, the former Manchester mayor, is considered to be the "favourite" candidate to succeed Starmer. However investors believe that a crucial question for nervous UK bond markets will be who becomes finance secretary. The euro fell 0.29%, to $1.14375 after reaching a three-month high on Friday of $1.1418. The dollar is 'flat' at 161.38 yen. Only the threat of Japanese interference prevents the currency from rising to its 40-year high 161.96 in 2024. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) rose by 0.08%. Gold spot rose 0.56%, to $4183.19 per ounce.
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The FOREX Dollar gains after US-Iran discussions, but the pound is choppy due to Starmer's exit.
The dollar rose on Monday, as the first round U.S.-Iran negotiations boosted?optimism about a possible peace deal. Meanwhile, the pound gained in choppy trade after British 'Prime Minister Keir?Starmer announced his resignation. JD Vance, the U.S. vice president, said that talks with Iranian officials held in Switzerland laid "a good foundation" for an eventual peace agreement despite tensions surrounding the Strait of Hormuz. U.S. crude dropped 2.61%, to $74.60 per barrel. Brent was down to $77.98 a barrel, a 3.21% drop on the day. However, the declines were kept in check by threats made by U.S. president Donald Trump to restart war, and the announcement from Tehran that they had closed the Strait of Hormuz. The dollar index (which measures the greenback against a basket currencies) rose by 0.06%, to 100.90. Meanwhile, the euro fell 0.24%, at $1.1444. POUND REVEALS AS POLITICAL UNCERTAINTY LOOMS Sterling recovered from a session-low of $1.318 after Labour leader Starmer announced he would step down, opening the door for Andy Burnham who could become the seventh prime minister in 10 years following the Brexit vote. Marc Chandler, Chief Market Strategist at Bannockburn Capital Markets, New York said: "I think that the bond market 'vigilantes' are a good way to guard against the next UK government moving too far left." The bond market is what will determine the credibility of a new government. The last rise in the sterling was 0.12%, to $1.3248. The Yen is nearing a 40-year low The dollar weakened 0.02% against the Japanese yen to 161.32 from 161.92, which was just a few cents shy of a two-year high reached last week. If the dollar were to break through 161,96, it would be at its lowest level since 1986. The Japanese currency experienced several sharp movements that saw the yen briefly strengthening?against?the greenback. Satsuki Katayama, the Japanese Finance Minister, said that after the Bank of Japan increased rates last week as was widely expected, authorities are prepared to react appropriately at any time to currency movements. The yen lost gains after a series of interventions that began on?April 30. A shift in focus from the Federal Reserve led traders to increase?expectations regarding rate increases this calendar year, favoring the dollar. Chandler said, "People should be alert for BOJ interventions and perhaps even supportive comments from America." On Monday, both Deutsche Bank and BofA global research?updated their Fed forecasts to include rate hikes in the month of September. BofA expects the central bank will raise rates 25 basis points in each of September, October, and December.
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Czech group Sev.en GI sues to reclaim losses of $1 billion at Callide C in Australia
Sev.en Global Investments, a Czech company, said it was suing Callide Energy Pty Ltd (CEPL) as well as CS 'Energy for losses exceeding $1 billion. This is in relation to the operation of the 'Callide C Power Station located in Queensland. The case is based on an explosion that occurred at a power station in 2021. Sev.en GI, owned by Czech billionaire investor Pavel Tykac in the energy sector, has expanded outside of Europe to Australia and the United States. Sev.en stated that the claim was filed by a subsidiary of the Federal Court of Australia and concerned the explosions of the C4 Generator, the collapse of?C3 Cooling Towers, and the explosions of the boiler C3. Sev.en GI reported that "between the two Callide 'C' generation units, more than 1,700 days in generation capacity have been lost just over the last five years." The claim seeks CEPL and CS Energy to be held accountable for CS Energy’s management of Callide C Power Station, and its representations made to the joint venture. CS Energy owns 100% of?CEPL which is 50% owner of Callide C. Sev.en GI acquired the remaining 50% of Callide C by 2025. CS Energy responded that it would defend itself against a legal claim and had known for years about potential claims. It said that "CS Energy is dedicated to the safe, compliant, and reliable operation of Callide C for the best 'interests of Queenslanders, as well as the Crisafulli government's Energy Roadmap," adding that it would not make any further comments. Sev.en GI stated that it was a major supporter of'rebuilding efforts' since the first incident at Callide C, in 2021. It also said that the financial support for the administration process had been provided since early 2024.
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Oil prices fall as US-Iran optimism about peace lowers gold prices
Gold prices rose by nearly 1% on Monday after recovering from a?an over one-week-low hit the previous session. Progress in U.S. Iran peace talks weighed down on oil and tempered inflation concerns. By 10:00 am, spot gold had risen 0.9% to $4199.07 an ounce. ET (1400 GMT). On Friday, prices reached their lowest level since June 11. U.S. Gold Futures for August Delivery fell by 0.7%, to $4216.30 an ounce. Ole Hansen, analyst at Saxo Bank, said that energy prices would remain a major short-term factor for the precious metals space. Hansen said that the "bumpy" talks between the U.S., Iran and Switzerland are still leading towards a deal which would add new barrels of oil to the market and put pressure on the crude prices. This in turn would help gold and increase the price. U.S. officials and Iranian delegates are reported to have made "encouraging" progress in their first round of discussions that ended on Monday morning. However, tensions remain over Lebanon and Strait of Hormuz, according to mediators. Brent crude futures dropped more than 3% following the announcement. According to the CME FedWatch Tool, traders see an 89% probability of a rate increase in December. This is up from 61% prior to the Federal Reserve meeting last week. Nine out of 19 Fed policymakers think they will need to increase the policy rate in this year. Gold tends to lose its appeal as interest rates increase, as it is less attractive than interest-bearing assets. In a Friday note, Bank of 'America stated that the $6,000 per ounce gold price target is unlikely as it would require the market to fully price in rate increases for this level to be reached. The original premise that 'underlies the bank’s bullish call on gold -- an unorthodox 'U.S. macro policy?-- remains intact. It added that the macro-policy remains unchanged. Silver spot rose by 2.4% at $66.46 an ounce. Platinum gained 1.7%, reaching $1,691.54, while palladium was up just 1%, at $1,271.25. Reporting by Sukanya Mittra and Ashitha Shivprasad, Bengaluru. Editing by Leroy Leo
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India's central banks sold gold for $8.9 billion, but its holdings remained unchanged.
?The Reserve Bank of India shifted a total of $8.94 billion on the 'foreign exchange markets in 'April, according to data released Monday.?It was doing this to help support the rupee, which had fallen to record lows during the U.S. - Iran war. In its monthly bulletin, the RBI reported that it had purchased $16.23 Billion and sold $25.17 Billion in April. The central bank sold a total of $9.8 billion in March. Data showed that the volume of gold held by the central bank remained unchanged at 880.52 tonnes in May, while its value dropped from $120.23billion late April to $112.6billion last month. Last month, the Indian rupee fell to a new record low of 96.96 per dollar as rising oil prices and global bond yields hammered the South Asian unit. The RBI intervened repeatedly to support the currency. As of the end of April, the RBI's outstanding net forward dollar sales were $95.30 billion, down from $103.06 billion at end-March. The RBI has refuted a report that appeared in the media earlier this month, which suggested the central bank may have sold a portion of its gold reserves. Data showed that the physical stock of gold has not changed since April. The 'backdrop for rupee has improved following a salvo policy measures announced earlier in the month to'shore up dollar inflows in the economy and a sharp decline in oil prices due to signs of progress in U.S.Iran negotiations. The rupee closed Monday at 94.6775 per dollar, down 0.4%. The latest data shows that India's foreign exchange reserves have fallen to $671.6 billion - a record low for more than a year. This is due to the central bank's attempts to defend its embattled currency. (Reporting and editing by Jaspreet K. Kalra, Nishit N. Navin)
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US approves Iranian oil sale amid final peace talks
The U.S. Treasury Department approved the production, sale and delivery of Iranian oil on Monday. This was a promise made by Washington and Tehran in an agreement last week. The general license announced by the two sides as they continue their talks to reach a final agreement on peace allows for the production, sale and delivery of crude oil, petrochemicals and petroleum products with Iranian origin through August 21. In a recent post on X, Treasury Secretary Scott Bessent stated that Iran had 'committed' to allowing free and open passage through the Strait of Hormuz as well as allowing?International Atomic Energy Agency inspectors to enter their country. As part of this framework, Treasury issued a temporary general license for 60 days authorizing production, delivery and sale of Iranian crude oil. The United States has agreed to waive the restrictions on the export of Iranian crude, petroleum products, derivatives and services such as banking, insurance and transportation. The general license issued on Monday allows for the importation of Iranian crude oil, petrochemicals and petroleum products to the United States. The license states that Iranian oil may be imported to the United States as part of the waiver if?necessary? for its sale or delivery. It does not allow?transactions with North Korea or Cuba - countries that are heavily sanctioned in the United States. (Reporting and editing by Doina chiacu, Susan Heavey, Katharine Jackson and Daphne Psaledakis)
Metal prices boosted by hope for US-Iran agreement
Prices of industrial metals rose on Monday due to a?hopefulness that the initial U.S. - Iran talks would pave the way for a?deal to end the conflict. Benchmark copper prices on the London Metal Exchange were?up 0.3% to $13,635 per metric tonne by 1601 GMT. The price of copper, which is used as an indicator of economic health by investors, has increased more than 15 percent since March 23. Mediators said that U.S. officials and Iranian officials had made "encouraging" progress by agreeing on a 60-day timeline to end the war. But tensions remained over the Strait of Hormuz and?Lebanon after Tehran once again closed the waterway, and U.S. president Donald Trump threatened new attacks.
Tom Price, Panmure Liberum analyst, said: "The market desperately wants to believe the U.S. - Iran war is over and is busy trying to price it in... But the reality is this ceasefire doesn't look robust."
"We have definitely entered a period where the markets are trying to return to something that is similar to pre-war conditions. Investors are once again looking to the themes of pre-war copper." The copper prices have risen over the last few years due to forecasts for strong demand from data centres required for AI, grid investments and electric vehicles.
Aluminium prices are expected to continue to be under pressure due to a rise in shipments from the Middle East. The Middle East is home 9% of global capacity for smelting.
Aluminum prices have fallen 10% since the beginning of June, when concerns about Middle East supply and global shortages peaked.
The LME cash contract premium over the 3-month forwards is narrowing, which indicates that there are fewer concerns about aluminium supplies. After reaching a '19-year peak above $104 per ton on 1 June, it is now around $10.
Reduced oil prices will reduce the production costs of aluminium and zinc. Both are?highly energy-intensive. This, traders claim, will eventually weaken the price support and make it a "bearish factor". Aluminium fell 0.9% to $3.365 per ton. Zinc gained 1.2% to $4,600. Lead firmed up 0.5% to $2,964. Tin rose 0.4% to $53,500. Nickel rose 0.7% at $17,715. (Reporting and editing by Sonia Cheema, Jonathan Ananda).
(source: Reuters)