Commodity Markets, Energy, Metals and Commodities

Energy • US rig count: US drillers added further rigs over the week, and the total rig count now stands at 477, the highest number since January 2016, and 161 higher than the lows seen in May 2016. The recent price strength in the oil market, following the OPEC deal should see further rigs added in the coming weeks. • Coal mine explosion: An explosion at an Inner Mongolia coal mine in China has led to the government ordering nationwide safety inspections of coal mines. These inspections could lead to a fall in coal output in the country, if mines fail inspections.

Metals • Specs cut position in gold: It has been another week where speculators have reduced their net long position in gold. The managed money net position in gold fell by 17,843 lots over the week, to leave specs with a net long of 103,392 lots, the smallest position they have held since February 2016. • Philippines mine audit: The Philippines will finally announce the results of the mine audit on the 15th December, and it is expected that there will be a number of suspensions. The Philippines is the largest nickel miner, having produced almost 465k tonnes in 2015.

Agriculture • Tightness in Egyptian sugar market: Egypt has been battling with low levels of sugar stock recently, and the government has had to take action in order to meet domestic needs. The government will start to sell 10,000 tonnes of sugar per day into the domestic market, up to a total of 156,000 tonnes. The government also scrapped import duties on sugar recently, in order to alleviate shortages in the domestic market. • Specs buy soybeans: The managed money net long position increased by 21,061 lots over the week, to leave specs with a net long of 134,705 lots. This is the largest position specs have held in soybeans since July 2016. This spec buying comes despite the record US soybean crop.