|Day's range||52.55 - 53.86|
Crude oil markets had a choppy week, testing support but then bouncing a bit before pulling back yet again. This is going to be a very noisy market going forward as all things China continue to be in the front of traders mind.
Natural gas markets had initially rally during the week but ran into a significant amount of resistance at the $2.00 level. At this point, it’s very likely that the market is going to continue to be very noisy.
Crude oil markets initially fell during the trading session on Friday but found enough support to turn around and make another attempt to rally.
The natural gas markets fell during the trading session on Friday, meaning testing the potential range that the market is trying to find.
Saudi Arabia and its Gulf Arab neighbors and large fellow OPEC producers the United Arab Emirates (UAE) and Kuwait are discussing deeper output cuts next week
The British pound has been pretty bullish during the week against the Japanese yen as we are attacking the ¥145 level. At this point, the market looks likely to break out, especially if we can get some type of “risk on rally.”
The Euro initially fell during most of the week but has recovered slightly as it looks like the gap is trying to hold from the weekly chart. That being said though, it’s difficult to imagine getting overly bullish at this point.
The Australian dollar had a rough week, breaking down below the recent lows, reaching towards the 0.66 handle. However, the market looks as if it is trying to finish the week with a little bit of a bounce, which should only offer more opportunities.
Gold prices surge as concerns over the spread of the coronavirus continued to buoy the yellow metal. Prices stormed higher rising by nearly 2% but is up more than 4% for the week. Gold implied volatility, which is represented by the GVZ index calculated by the Chicago Board of Options Exchange, surged more than 20% on Friday and is up 33% for the week hovering near the 16% level.
Commodity trading major Vitol said it expected oil prices to recover later this year once the effect of the coronavirus epidemic wanes
(Bloomberg) -- Teck Resources Ltd. dropped the most in three years after cutting its forecast for steelmaking coal as extreme weather and rail blockades disrupted output at a time when the coronavirus outbreak is threatening demand.The Vancouver-based company will temporarily reduce production and shut down its Neptune shipping terminal, it said Friday in its quarterly earnings report. The move will help address high levels of inventory and allow it to move forward with an upgrade at the Neptune facility.It’s been a tough period for Teck, as profit in 2019 was hurt by slumping coal prices and a C$910 million ($686 million) after-tax writedown on its stake in the Fort Hills oil-sands mine. Permitting delays and unrest in Chile will affect the cost of the company’s Quebrada Blanca Phase 2 project. A new schedule and updated capital estimate for that is planned for the first quarter.Teck dropped as much as 13% after the start of regular trading in Toronto, the most intraday since May 2016, and was down 11% as of 9:55 a.m. in Toronto.The miner is also waiting for approval from the Canadian federal government on its Frontier oil-sands project in Alberta. A negative decision could result in an additional impairment of about C$1.13 billion, Teck said. It expects a decision by the end of the month.Work to upgrade the Neptune Bulk Terminals will include a five-month shutdown from May to September, with completion of the work expected in the first quarter of 2021. If that’s delayed, “we may limit our production and sales temporarily on expiry of our contract with Westshore Terminals.” The miner has expressed frustration in its dealings with Westshore Terminals Investment Corp. and has been shifting steelmaking coal freight to its own facility as a result.“Given the potential for weaker demand in the short-term due to the effects of the coronavirus and the high inventory levels due to rail and port constraints, we are choosing to temporarily reduce production,” Teck said. “The extent and duration of impacts that the coronavirus may have on the demand and prices for our commodities, on our suppliers and employees, and on global financial markets is not known at this time, but could be material.”Key FiguresTeck forecast first-quarter steelmaking coal sales of 4.8 million to 5.2 million tons, compared with a Feb. 6 estimate of 5.1 million to 5.4 million tons.Full-year steelmaking-coal production is seen at 23 million to 25 million tons, down from 25.7 million last year.The company reported fourth-quarter adjusted earnings per share of 22 cents, missing the lowest analyst estimate compiled by Bloomberg.To contact the reporters on this story: Liezel Hill in Johannesburg at email@example.com;Danielle Bochove in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Steven FrankFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Crude prices have dipped on Friday, after briefly pushing across the $54 level. Investors remain unnerved by the China coronavirus and are keeping an eye on OPEC’s proposal to cut production.
Oil prices fell about 1% on Friday on renewed concerns about crude demand being pinched by the economic impact of the coronavirus outbreak, while OPEC and allied producers appeared to be in no rush to curb output. U.S. crude futures settled 50 cents lower, or 0.9%, at $53.38. Both benchmarks were on track for their second consecutive weekly rise, with Brent up 2% and U.S. crude rising 2.6%, as fears over the virus' impact on demand eased earlier in the week and after a smaller-than-expected U.S. crude stock build.
Based on the early price action, the direction of the April WTI crude oil market the rest of the session on Thursday is likely to be determined by trader reaction to the 50% level at $54.20.
Bloomberg analysts projected withdrawals as low as 138 Bcf and as high as 158 Bcf. The Wall Street Journal estimates a figure as low as 135 Bcf. Reuters is looking for a withdrawal as high as 166 Bcf. NGI’s model is calling for a 149 Bcf withdrawal.
Spain's Repsol on Thursday reported a net loss for 2019, sapped by lower oil and gas prices and one-off charges mainly related to its pledge to cut its greenhouse gas emissions. A 2019 net loss of 3.8 billion euros ($4.10 billion), compared with net income of 2.3 billion euros in the previous year, was primarily because of a 4.8 billion euro impairment Repsol booked mainly on production assets in North America because of its climate targets. Adjusted net profit came in at 405 million euros ($437.08 million), missing an analyst estimate of 418 million euros provided by the company.
Devon's (DVN) board of directors approves a 22% hike in dividend rate. The company is taking steps to improve free cash flow, which will help it sustain dividend payments.
(Bloomberg) -- At least five of America’s coal producers went bankrupt in 2019. Prices for the fossil fuel have plunged 40% since a 2018 peak. And some of the nation’s largest miners are retrenching and slashing their dividends. But don’t be mistaken: The fight against climate change hasn’t killed off Coal Country yet.Instead of pouring money into dividends and buybacks, the nation’s largest coal producers say they’re hoarding cash to weather what they see as an impermanent storm. Overall, the industry returned more than $1 billion to investors last year before retrenching. The goal this year: Be ready to start mining again and paying dividends at the first sign of a market revival. They’re betting that prices will bottom out in the first half of 2020 before rising in the second half as production declines and global consumption gains.That’s spurred a new “mantra” at Peabody Energy Corp., according to Chief Executive Officer Glenn Kellow. It is “to live within our means,” he said during his Feb. 5 earnings call.A year ago, Peabody announced its biggest dividend ever, and said it would return to shareholders all of its free cash flow. On Feb. 5, the message was very different: The nation’s leading coal producer said it was suspending its dividend, halting buybacks and cutting capital expenditures.Hope has been in short supply for coal miners. The industry has been battered as much of the world forsakes the fuel to fight climate change, and as low natural gas prices squeezes its economics. Coal once accounted for more than half of all U.S. power generation. Today it’s less than 25%.The decline underscores the limitations of U.S. President Donald Trump’s pro-fossil fuel policies. While the White House has rolled back environmental regulations and tried to rescue coal plants from early retirement, utilities are still shifting to cheaper and cleaner natural gas, wind and solar power. Meanwhile, all of the Democratic presidential candidates have taken a stance against coal.And yet there’s still “a hope that prices have bottomed out and will begin to tick up a bit,” said Michael Dudas, an analyst with Vertical Research Partners, in a telephone interview. “Companies are trying to preserve cash and keep conservative.”Optimism within the industry is probably stronger among companies producing coal used by steelmakers, Dudas said. Still, thermal coal might also see a gain with a hot summer or a colder winter, he said.Because of the lower prices, higher-cost mines are being shut down and there’s been a wave of bankruptcies. The result, according to Dudas: “Supply comes off the market, inventory levels start to get worked off and, eventually, we will have more demand and that will move the price cycle higher.”Peabody’s not alone. Consol Energy Inc. also announced it’s cutting capital expenditures. And while Arch Coal Inc. boosted its dividend, the company said there will be less cash available to return to shareholders through share buybacks. Instead, the money will go toward toward a new mine in West Virginia, expected to open in mid-2021.”We’re confident that Arch is well equipped to weather the current market downturn,” said Arch CEO John Eaves in a Feb. 6 conference call. “And just as well equipped to capitalize on the next market up cycle whenever it occurs.”Jimmy Brock, the Consol CEO, also sees a glimmer on the horizon. “Low prices are starting to drive a supply response,” he said during his earnings call last week. “There are some indications that provide hope for an improvement in the second half of 2020.”Alliance Resource Partners LP too cut its distribution by 26% this month, with CEO Joe Kraft saying it made more sense to keep the cash to ride out a bumpy year.Prices for thermal coal delivered to Amsterdam, Rotterdam and Antwerp, an Atlantic benchmark, are about $52 a metric ton. That’s down almost 50% from an October 2018 peak, and last month it slipped to the lowest in 44 months. Booming natural gas supplies and a mild winter are dragging down demand at power plants, while utilities in the U.S. and Europe continue to shift away from the dirtiest fossil fuel in an effort to curb climate change.Metallurgical coal is also down, sliding more than 40% from an early 2018 high. Prices for the steelmaking ingredient plunged steeply in the second half of last year as global economic trends slowed and trade tensions heated up with China, the world’s biggest producer of the metal.(Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News, has committed $500 million to launch Beyond Carbon, a campaign aimed at closing the remaining coal-powered plants in the U.S. by 2030 and slowing the construction of new gas plants.)To contact the author of this story: Will Wade in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Reg Gale at email@example.comFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Indonesian coal exports are being disrupted because the government has not issued technical guidance on the implementation of new shipping rules, an industry group said on Thursday. Indonesia, the world's biggest thermal coal exporter, in 2018 issued regulations requiring its coal and palm oil exporters to use domestic insurance and shipping companies. Most coal sales from Indonesia are under free-on-board contracts, so overseas buyers who are in charge of securing vessels are still waiting for the Trade Ministry to issue technical guidance, said Hendri Tan, a deputy chairman of the Indonesia Coal Miners Association (ICMA).