Saudi Arabia Extends Oil-Production Cut to End of the Year -- Commodities Roundup

MARKET MOVEMENTS:

-- Brent crude oil is down 1.7% at $89.36 a barrel

-- European benchmark gas is up 2.5% to EUR37.91 a megawatt hour

-- Gold futures are down 0.2% at $1,837.50 a troy ounce

-- LME three-month copper futures are down 0.2% at $7,993 a metric ton

-- Wheat futures are down 1.9% to $5.58 a bushel

TOP STORY:

Saudi Arabia Extends Oil-Production Cut to End of the Year

Saudi Arabia extended its oil production cut until the end of the year, as tightening supply continues to support energy prices.

The Kingdom will continue with its oil-production cut of a million barrels a day until the end of December, according to a statement from the Saudi Press Agency.

The cut has been in place since July, with production from the Kingdom likely to be around 9 million barrels a day through November and December, according to Wednesday's statement.

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OTHER STORIES:

BP Considers $1 Billion US Pipelines Stake Sale, Reuters Reports

BP is exploring the sale of a 49% stake in its U.S. oil-and-gas pipeline network in the Gulf of Mexico, hoping to raise as much as $1 billion, Reuters reports, citing people familiar with the matter.

The potential divestment would help the British oil major meet its targets to reduce debt and maintain its dividend.

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MARKET TALKS:

Palm Oil Edges Higher, Supported by Weak Ringgit

1011 GMT - Palm oil edged higher, supported by the ringgit's weakness. A weaker ringgit raises prospects of higher palm-oil exports, as ringgit-denominated crude-palm-oil futures and product prices become less expensive to international buyers, says Lim Tai An, an analyst at Phillip Nova, in a commentary. Based on technical analysis, palm oil prices are hovering around support at the MYR3,700/ton level, and is at risk of falling should there be a lack of positive news, the analyst adds. The Bursa Malaysia Derivatives contract for December delivery closed MYR9 higher at MYR3,717 a ton. ([e-mail])

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Metals Under Pressure Amid Prospect of Further Rate Hikes

0758 GMT - Metal prices remain under pressure, with the prospect of further monetary tightening from the Federal Reserve boosting safe-haven assets. Three-month copper is down 0.8% to $7,943.50 a metric ton while aluminum is 0.9% lower at $2,272.50 a ton. Gold, meanwhile, is down 0.4% at $1,834.60 a troy ounce while the ICE dollar index is up 0.1% to 107.05. Jobs data in the U.S. on Tuesday showed that the labor market remains strong, increasing the likelihood of more rate hikes from the Fed, ANZ says in a note. "Subdued manufacturing activity in China and in the U.S. added to the bearish market sentiment," it adds. ANZ also highlights that LME copper inventories rose to 168,000 tons--the highest level since June 2022. ([e-mail])

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Oil Slides Ahead of Key OPEC Meeting

0722 GMT - Oil prices slide ahead of a key OPEC meeting later. Brent crude is down 0.6% to $90.32 a barrel while WTI is 0.7% lower at $88.61 a barrel. The OPEC Joint Ministerial Monitoring Committee is due to meet for its regular market monitoring meeting. Standard Chartered says it is unlikely producers at the meeting will be less cautious around production due to uncertainties around the global economy and central-bank policy. "In particular, we think it is too early for the market to start to factor in any reduction in Saudi Arabia's voluntary output cuts," the bank says in a note. The recent slide from $97 a barrel for Brent should demonstrate that the current price situation remains fragile, Standard Chartered says. ([e-mail])

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Dairy Prices Appear to Have Bottomed Out

0144 GMT - Dairy prices appear to have found a bottom after a prolonged fall, Westpac says. At the GlobalDairyTrade auction overnight, whole milk powder prices rose by 4.8% and skim milk powder prices lifted by 6.6%. Overall, the broader GDT Price Index was up 4.4% on the previous auction. "We remain cautious on the outlook and maintain our 2023/24 milk price forecast of NZ$6.75/kg," says Nathan Penny, senior agricultural economist at Westpac. "That said, we do note that the risks around our forecast are now more balanced than they were previously." ([e-mail]; @dwinningWSJ)

(END) Dow Jones Newswires

10-04-23 0709ET