Saudi Oil Cuts Set to Keep Gasoline Prices Higher -- Commodities Roundup

MARKET MOVEMENTS:

-- Brent crude oil is up 0.5% at $92.49 a barrel.

-- European benchmark gas is up 1.1% to EUR35.09 a megawatt hour.

-- Gold futures are down 0.1% at $1,933.10 a troy ounce.

-- LME three-month copper futures are down 0.1% at $8,388 a metric ton.

-- Wheat futures are up 1.7% to $5.98 a bushel.

TOP STORY:

Saudi Oil Cuts Set to Keep Gasoline Prices Higher

Saudi Arabia's decision to extend cuts to its crude-oil output until the end of the year is likely to lead to a significant supply shortfall for the rest of the year, keeping prices higher at the pump, according to the International Energy Agency.

In its monthly report, the IEA said cuts from the Organization of the Petroleum Exporting Countries, a cartel of oil-producing nations where Saudi Arabia is the largest producer and de facto leader, have led to 2.5 million barrels a day being removed from the market since January, though this has mostly been mitigated by record supply coming from the U.S. and Brazil, with non-OPEC supply up by 1.9 million barrels a day.

However, with Saudi production as well as Russian exports being reduced until the end of the year, the market is now likely to see a significant shortfall of about 1.1 million barrels a day in the fourth quarter, which is likely to support prices, the IEA said Wednesday. The unwinding of the cuts in 2024 should bring the market back to surplus, but a lack of oil inventories could mean high volatility in the market, the Paris-based agency added.

OTHER STORIES:

China's Electric-Vehicle Makers Face EU Antisubsidy Probe

The European Union is launching an antisubsidy investigation into China's electric-vehicle makers, opening a new front in the battle for leadership of the global clean-technology industry.

The probe, announced Wednesday, reflects growing concern in Europe about the impact of low-price products from China on the bloc's domestic industries. It could result in tariffs if officials from the European Commission, the bloc's executive body, conclude that Chinese EV manufacturers are receiving subsidies that are hurting Europe's auto industry.

"Global markets are now flooded with cheaper Chinese electric cars," European Commission President Ursula von der Leyen said in a speech on Wednesday. "Huge state subsidies" are keeping prices artificially low and distorting the European market, she said.

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BP CEO Bernard Looney Resigns Over Past Relationships With Colleagues

BP CEO Bernard Looney resigned abruptly Tuesday over past relationships with colleagues, the company said, less than four years after taking over the London-based oil giant and embarking on an ambitious plan to position it at the vanguard of the global transition to renewable energy.

Looney's resignation was a surprise, and the company said in a release on Tuesday that his departure is immediate.

The company on Tuesday evening said Looney was not fully transparent about past personal relationships with colleagues. BP said Chief Financial Officer Murray Auchincloss would serve as CEO on an interim basis.

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Sigma Lithium Mulls Alternatives as Proposals Roll In

Sigma Lithium is evaluating strategic alternatives receiving several proposals for its subsidiary in Brazil.

The Canadian lithium producer said Wednesday that it has received several proposals for itself, for its wholly owned subsidiary Sigma Mineracao as well as the Grota de Cirilo project in Brazil.

It didn't identify any of the interested parties, but said they include companies in the energy, auto, batteries and lithium refining industries.

Sigma said the proposals it received from the potential strategic partners differ in nature and structure and are still in the process of review and negotiations.

MARKET TALKS:

Palm Oil Closes Higher, Tracking Soybean Oil's Gains

1012 GMT - Palm oil closed higher, tracking soybean oil's overnight gains on the Chicago Board of Trade, amid the recent spike in crude oil prices, Abdul Hameed, director of sales at Pakistan-based Manzoor Trading, says in a research note. Pricier crude encourages the use of biofuels derived from vegetable oils. Meanwhile, analysts expect strengthening El Nino conditions through the North Hemisphere winter until February 2024, which could cause major disruptions to the world's agricultural production and supply. The Bursa Malaysia Derivatives contract for November delivery is MYR44 higher at MYR3,727 a ton ($796.88). ([e-mail])

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Metals Pause as China Property Worries Weigh

0746 GMT - Metals prices are subdued as concerns over China's property sector linger. Three-month copper prices on the LME inch down 0.1% to $8,382.50 a metric ton while aluminum ticks up 0.2% to $2,200 a ton and zinc adds less than 0.1% to $2,484 a ton. Concerns about China's property sector have been a consistent drag on metals prices in recent weeks. Home sales in China are slowing while concerns about the nation's real-estate giants remain high, Australian bank ANZ says in a note. "Industrial metals fell as the outlook for China's property sector weakened. Investor sentiment remains bleak," the bank says in a note. ([e-mail])

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Oil Holds at 10-Month High on Supply Worries

0730 GMT - Oil prices hold steady at a roughly 10-month high as investors worry about supply cuts tightening the market. Brent crude oil rose 0.3% to $92.32 a barrel. The modest increases add to strong gains Tuesday that came after an OPEC report that left demand and supply forecasts largely unchanged, but implied a large deficit of over 3 million barrels a day would build towards the end of the year. That would challenge Saudi Arabia and Russia's recent unilateral steps to reduce global oil flows in an attempt to boost price. Both are members of OPEC+ whose stated goal is to balance the oil market. Investors are awaiting the IEA's monthly report later Wednesday for their view on the global oil outlook. ([e-mail])

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Iron Ore Rises on China's Better-Than-Expected Credit Data

0303 GMT - Iron ore prices are higher in early Asian trading despite China's property sector losing momentum after a rebound driven by a raft of stimulus measures. Analysts reckon that investor sentiment is boosted by China's stronger-than-expected credit data in August. "Traders look through the weak home sales to focus on stronger credit that should provide some support for steel demand," ANZ analysts say in a research note. The most traded iron ore contract on the Dalian Commodity Exchange is up 0.8% at CNY931.0 a ton ($127.67). ([e-mail])

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China Key Chemicals Demand To Decrease Over Time, OPIS Panelists Say

1751 ET - China is exporting increasingly larger volumes of polyethylene and building significant capacity to produce more, paving the way for self-sufficiency in one key chemical segment, said Uptal Sheth, executive director, Asia Plastics & Polymers at Chemical Market Analytics at the OPIS World Chemical Forum in Houston. But China's appetite for these chemicals will gradually decline in the coming decades as economic growth slows down, while India's will increase, he said. A young and large population in India is going to be driving chemical consumption there, said Ramkumar Shankar, the managing director of chemical company Chemplast Sanmar. "India is a beacon of hope in a sea of gloom," he said. ([e-mail]; @benmorenne)

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(END) Dow Jones Newswires

09-13-23 0705ET