Oil

The Obama administration slammed the brakes on the Dakota Access pipeline on Sunday, refusing to issue a required easement from the Army Corps of Engineers while saying it will conduct a more stringent environmental review to consider alternate routes and consult further with the Standing Rock Sioux tribe, which has bitterly opposed the project.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

However, the 1,172-mile pipeline may not be dead in its current form. Nearly all of the pipeline has been completed except a few miles that are planned to flow underneath the Missouri River and the manmade Lake Oahe in North Dakota. The Army has said they will ask Energy Transfer Partners, the developer of the pipeline, to consider alternative routes and said that would be best accomplished through an environmental impact statement with full public input and analysis.

The Army Corps had actually approved the easement back in June but stepped in again after a federal judge dismissed a lawsuit by the Standing Rock Sioux whose reservation is near Lake Oahe. President-elect Donald Trump came out in support of completing the pipeline as planned last week and his administration could, potentially, undo these recent actions by the Obama administration.

Yesterday, the Organization of Petroleum Exporting Countries finalized a deal to cut production by 1.2 million barrels a day starting in January, its first reduction since 2008.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The production deal will last six months with a committee composed of three OPEC country members monitoring and reviewing the decision at their next meeting in May to determine if the cuts will extend for another six months.

Trading volume (at the bottom) surged as crude moved up on Wednesday

Trading volume (at the bottom) surged as crude moved up on Wednesday. Source: @StockCharts.com.

On Wednesday, U.S. crude jumped 9.3% to settle at $49.44 a barrel. The number of contracts traded on Wednesday rose sharply as prices made a one-month high. Rising volumes confirm that new money is supporting the price move, increasing the likelihood that the trend will continue. Read more

The Organization of the Petroleum Exporting Countries was trying this morning to rescue a deal to limit oil output as tensions grew among the producer group and non-OPEC member Russia, with top exporter Saudi Arabia saying markets would rebalance even without an agreement.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

OPEC experts started a meeting in Vienna at 0900 GMT and were due to make recommendations to their ministers on how exactly the organization and its member-states should reduce production when it meets on Nov. 30.

Meanwhile, the Algerian and Venezuelan oil ministers were to travel to Moscow on Monday and Tuesday in a final attempt to persuade Russia to take part in cuts instead of merely freezing output, which has reached new highs in the past year.

Steel Futures Surge on Upbeat Chinese Demand

Chinese steel futures jumped over 6% to the highest in 31 months on Monday, as investors raised bets that strong property and infrastructure investment will sustain demand in the world’s top consumer, spurring a similar rally in iron ore and zinc.

Two-Month Trial: Metal Buying Outlook

The red-hot rally in steel is bound to push iron ore above $80 a metric ton for the first time since October 2014, having already lifted zinc to a nine-year high.

Iraq would have to compensate international oil companies for limits placed on their production, according to industry sources and documents seen by Reuters, further reducing the prospect it will join any OPEC deal to curb the group’s output.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The compensation — stipulated in contracts — would compound the financial hit of losing much-needed revenue from crude sales, if the cash-strapped country were to yield to OPEC entreaties to curtail national production.

Why Are Chinese Investors Flocking to Copper?

Chinese investors, whose rush into copper hauled it to 16-month highs recently, say infrastructure spending and government reforms will keep the metal well supported this year and into 2017.

The energy minister for top Organization of Petroleum Exporting Countries member-state Saudi Arabia said on Thursday on Saudi state-run television that he was optimistic about OPEC’s deal to limit oil output and mentioned the lower end of a previously agreed production target, helping spur a rally in the price of crude.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The cartel, at a meeting in Algeria in September, made a preliminary deal to limit oil output. Its details are still being worked out.

SolarCity Shareholders Approve Tesla Merger

Shareholders of Tesla Motors Inc. and SolarCity Corp. approved Tesla’s $2.1 billion all-stock offer to merge and create one company headed by Elon Musk that would sell emissions-free cars and rooftop solar panels that power them.

“Your faith will be rewarded,” Mr. Musk told Tesla investors on Thursday after the company announced shareholders overwhelmingly approved the deal.

Two-Month Trial: Metal Buying Outlook

Tesla announced that the merger was approved by 85% of Tesla shareholders, excluding Mr. Musk and other affiliated shareholders. SolarCity didn’t disclose the percentage of its shareholders voting.

China has come in ahead of schedule on its target of cutting 45 million metric tons of steel capacity in 2016, reaching the goal before the end of October, the country’s state economic planner said on Friday.

Two-Month Trial: Metal Buying Outlook

China also hoped to achieve its 2016 goal of cutting 250 mmt of coal capacity before the year-end, Li Pumin, general secretary of the National Development and Reform Commission (NDRC), told a news briefing.

Oil Surplus Poised to Continue in 2017

The oil market surplus may run into a third year in 2017 without an output cut from the Organization of Oil Exporting Countries, while escalating production from exporters around the globe could lead to relentless supply growth, the International Energy Agency said on Thursday.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

In its monthly oil market report, the group said global supply rose by 800,000 barrels per day in October to 97.8 million bpd, led by record OPEC output and rising production from non-OPEC members such as Russia, Brazil, Canada and Kazakhstan.

Unplanned global oil supply disruptions averaged more than 3.6 million barrels per day in May, the highest monthly level recorded since the U.S. Energy Information Administration started tracking global disruptions in January 2011.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

From April to May, disruptions grew by 0.8 million bpd as increased outages, largely in Canada, Nigeria, Iraq, and Libya, more than offset reduced outages in Kuwait, Brazil, and Ghana. Six months later, the U.S. is joining the energy disruption party. On Saturday, an explosion and fire in Alabama sent futures surging and traders scrambling to supply the East Coast states with fuel.

EIA Energy Disruptions

Oil supply disruptions as measured by the U.S. Energy Information Administration. Source: EIA.

Colonial Pipeline Co., which carries gasoline and other refined products from Houston to Linden, N.J., was forced Monday to shut its two main pipelines after a crew working near the site of a prior spill hit the line with construction equipment. Read more

Oil inventory hit an all-time high after a surprisingly strong last full week of October and a major copper trader said the LME should cut fees.

Oil Inventory Hits an All-Time High

The Energy Information Administration said oil inventory is up by 14.4 million barrels in the week to October 28, reaching 482.6 million barrels. That’s the largest weekly build since the U.S. Energy Department started keeping records in 1982.

Two-Month Trial: Metal Buying Outlook

Oil prices fell after the data, with benchmark U.S. crude futures dropping 3.3%, or $1.57, to $45.12 a barrel, their lowest level since late September. U.S. crude imports jumped by about 2 million barrels per day to just under 9 million bpd, the highest rate since September 2012.

Red Kite Founder Says LME Should Cut Fees

The London Metal Exchange should further cut fees and review rules that may give high-speed traders an unfair advantage, the founding partner of Red Kite Group, Michael Farmer, said on Tuesday.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

Farmer, who has earned the nickname Mr. Copper for his long experience in industrial metals trading, warned that rising fees and high-frequency trading will further cut liquidity on the LME, which has suffered sliding volumes this year.

Many believe gold will again reach $1,300 an ounce next year and China now imports more crude oil than the U.S.

Gold Above $1,300/Ounce? Next Year, Poll Says

Gold is likely to recover to above $1,300 an ounce next year as a pickup in physical demand counters more potential U.S. rate increases, a Reuters poll at an industry event showed.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The precious metal had lost nearly 9% from July’s two-year highs to trade around $1,255 an ounce on Tuesday, hit by expectations the Federal Reserve would raise interest rates in December for the second time in a year.

China Overtakes U.S. as Top Crude Oil Importer

China imported record volumes of crude oil last month, eclipsing the U.S. as the world’s top buyer of foreign oil as Beijing’s state reserves shipped in cheap crude to fill new storage tanks.

Two-Month Trial: Metal Buying Outlook

September’s crude imports rose 18% from a year earlier to 33.06 million metric tons or 8.04 million barrels per day (bpd) on a daily basis, customs data showed.

Chinese aluminum companies are looking to get into the lucrative aerospace and automotive markets while U.S. oil drillers are ramping up production with oil above $50 per barrel.

China Eyes Automotive, Aerospace Aluminum Markets

China’s giant aluminum makers are pushing into the global automotive and aerospace markets, with industry sources expecting their presence to heat up competition and possibly spark a buying spree for Western metals companies.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

China’s top aluminum companies are venturing into the more lucrative parts of the global value chain.

US Drillers Extend Rig Recovery

The number of oil rigs drilling in the U.S. rose again this week, extending one of its best recoveries with no cuts for 16 straight weeks, with analysts expecting more additions as crude prices hold over $50 a barrel. Drillers added 4 oil rigs in the week to Oct. 14, bringing the count up to 432, the most since February, but still below 595 rigs a year ago, according to energy services firm Baker Hughes Inc. on Friday.