Commodities: OPEC and Oil, Metals, Agriculture
• Iraq & OPEC: The Iraqis now say that they will be willing to cut output as part of the larger OPEC deal. The Prime Minister wants to see OPEC cut output by 900,000 bbls/d, from the current 33.6MMbbls/d. Previously Iraq was insisting to be exempt from any cuts, and their apparent change in attitude does increase the likelihood of an OPEC agreement. • US inventory data: There was little in the way of surprises from EIA inventory data released yesterday. US crude oil inventories declined by 1.25MMbbls (similar to the API numbers), while US gasoline stocks increased by 2.3MMbbls.
Metals • US Midwest aluminium strength: Premiums for US Midwest aluminium have moved higher this week, with tightness in the spot market. Regional producers are apparently sold out for the month of December. As a result the premium over the week has strengthened to 7.70-8.25c/lb from 7.50-7.75c/lb, the strongest levels seen since May this year. • Silver weakness: ETF holdings of silver have declined to their lowest level since August 2016, with total known holdings standing at 661.28m oz, down from a record high of 676.15m oz back at the end of October. A further reduction in holdings will put further pressure on silver, which is already down over 12% since early November.
Agriculture • Sugar deficit narrows: Green Pool Commodity Specialists have revised their 2016/17 global sugar deficit estimate from 5.8m tonnes to 5.3m tonnes. The driver behind this change has been weaker demand, and this has been a result of the stronger prices that we have seen in the sugar market this year. • Indonesian palm oil: The Chairman of the Indonesian Palm Oil Association expects palm oil output in the country this year to decline by 10% to 30.9m tonnes, the fall is a result of the impacts from El Nino. However moving into 2017, expectations are that there will be a recovery in production.