Latest news with #OleHansen
Mid East Info
5 days ago
- Business
- Mid East Info
COT Report: Hedge funds return to gold; elevated grains short ahead of key season
Ole Hansen, Head of Commodity Strategy, Saxo Bank Commodities The latest COT reporting week to 20 May captured the aftermath of the announced 90-day US–China trade truce, which included a temporary reduction in tariffs. While the news supported additional gains across global stock markets and renewed USD weakness, the commodities sector traded in a very mixed fashion—resulting in a 1% drop in the Bloomberg Commodities Index. This was driven by weakness across most sectors, except precious metals and grains. The managed money group of traders, tracked in this update, responded with limited enthusiasm. This was partly due to the current lack of clear trends across several major commodities, many of which have experienced volatile but rangebound trading—conditions that tend to reduce appetite for large-scale, one-directional bets. One of the few exceptions was the grains sector, where traders held the biggest net short position across soybeans, corn, and wheat in nine months—and the highest for this time of year in six years—just ahead of the important growing season, during which weather developments often have a significant impact on market performance. In energy, a rangebound crude oil market saw net selling of WTI offset by demand for Brent, keeping the total net long near a six-week high at 245k contracts. Despite trading lower on the week, demand for the NY diesel contract jumped, resulting in the first—albeit small—net long in two months. Hedge funds turned net buyers of gold for the first time in ten weeks, during which the net long had slumped to a 15-month low at 111k contracts—a 52% reduction since January. Renewed demand was supported by signs that the month-long correction had run its course, after prices rallied back above USD 3,200 per ounce. Meanwhile, a small amount of net silver buying paled in comparison with platinum, which—together with palladium—surged after finally breaking through key levels of resistance. The platinum position flipped back to a 6.2k long, while the net short in palladium was reduced by 27%. Overall, a sustained rally will force additional demand from wrong-footed short sellers, and those rebuilding longs. Note, in the past five years, when platinum traded mostly sideways, several periods of demand saw the platinum net long peak between 20k and 25k contracts. Across the agriculture sector, the main focus was once again on the grains segment, which—except for wheat—saw broad net selling from funds during a week where the Bloomberg Grains Index overall showed a 1.6% gain. This lifted the net short across the three major crop futures to 330k contracts—a nine-month high, and the highest for this time of year in six years. Managed money speculators are pricing in almost no weather or logistics risk premium as we enter the critical US summer growing season. Forex The latest reporting week to 20 May covered an extended risk-on period across markets following the US-China decision to lower tariffs for 90 days. However, while these developments saw renewed and broad US dollar weakness, the focus among speculators—wrongly as it turned out—pointed in the opposite direction, with naked short bets rising across all the eight IMM forex futures covered in this update, overall leading to a 27% reduction in the gross US dollar short to USD 12.4 billion. The bulk of selling against the US dollar was led by CAD (–21.7k or USD 1.6 billion equivalent) and euros (–10.3k or USD 1.5 billion equivalent), followed by AUD and JPY. In the days that followed the reporting period, the greenback saw fresh weakness amid fiscal debt concerns and renewed tariff focus after Trump vented his anger against the EU and Apple, culminating in early Monday trading when the Bloomberg Dollar Index hit a December 2023 low.
Mid East Info
22-05-2025
- Business
- Mid East Info
Israel attack risks add modest risk premium to crude prices – Saxo Bank MENA - Middle East Business News and Information
Ole Hansen, Head of Commodity Strategy, Saxo Bank Following the sharp price collapse in early April, both West Texas Intermediate (WTI) and Brent crude have settled into broad, yet volatile, USD 10-per-barrel trading ranges. WTI has fluctuated between USD 55 and USD 65, while Brent has traded between USD 58.50 and USD 68.50. Market sentiment continues to swing between concerns over rising global supply, and fears about the potential economic fallout from ongoing global trade tensions. In recent days, trader focus has increasingly shifted toward the Middle East. Volatility in the oil markets has been partly driven by speculation surrounding the Iran–US nuclear negotiations. A successful outcome could pave the way for Iran to reintroduce more barrels into an already well-supplied global market, potentially putting some additional downward pressure on prices. However, this bearish sentiment was quickly reversed within the past 24 hours. First, Iran's Supreme Leader Ayatollah Ali Khamenei dismissed the prospects of meaningful negotiations with the US, calling Washington's demands—particularly the requirement that Iran halt uranium enrichment—'outrageous.' This was followed by a CNN report citing new US intelligence suggesting Israel is preparing for a potential strike on Iranian nuclear facilities. Crude prices responded with an overnight jump of USD 1 per barrel. A military confrontation involving Iran would almost certainly derail the nuclear talks and raise concerns about oil supply from the Persian Gulf, a region that accounts for roughly one-third of global crude shipments. That said, recent history suggests that geopolitical risk premiums often struggle to take hold in the market. Despite repeated episodes of heightened tension in recent years, traders have typically concluded that actual risks to supply are limited. According to Goldman Sachs, a disruption of one million barrels per day could initially drive prices up by more than USD 5 per barrel. Yet, the impact may be short-lived due to the significant spare capacity built up by Gulf Cooperation Council (GCC) producers—particularly Saudi Arabia—and a generally soft global demand outlook. Since September 2022, when OPEC's total production reached a near 30 million barrel per day peak, subsequent production cuts—in order to actively manage oil production to ensure price stability—have seen the group's output decline by around 2.7 million barrels per day, in the process surrendering market shares to non-OPEC+ producers benefiting from high and stable prices. Within OPEC, however, Iran—which has not been bound by quotas amid US sanctions—has been able to boost production by close to 900,000 barrels per day, thereby increasing its OPEC market share from 8.3% to more than 12% last month. In its latest Monthly Oil Market Report, the International Energy Agency (IEA) warned of a potential oil glut both this year and next. This forecast is driven by strong supply growth, including already-announced output increases from eight OPEC+ members led by Saudi Arabia, and weaker-than-expected demand growth. The latter is attributed in part to slowing global economic activity, exacerbated by President Donald Trump's tariff policies, which have strained trade relations with key economic partners, while weighing on the economic growth outlook. Given these dynamics, the potential for a sustained price rally appears limited. Technical resistance near USD 65 for WTI and USD 69 for Brent may cap any near-term upside. Even in a worst-case scenario where Iranian supply is disrupted, any price spike would likely be met by aggressive hedging and selling activity from higher-cost producers seeking to lock in future revenues. As such, while volatility remains high, fundamental and structural factors suggest that lasting upward momentum in crude prices may be constrained.
Business Recorder
22-05-2025
- Business
- Business Recorder
Copper drifts higher on worries about US debt
LONDON: Copper prices edged higher on Wednesday as investors spooked by growing US debt levels looked for hard assets and as the dollar weakened. Benchmark three-month copper on the London Metal Exchange (LME) was up 0.2% at $9,536 a metric ton by 1355 GMT. Republicans in the US House of Representatives are trying to overcome internal divisions about President Donald Trump's tax cut and spending bill, which would extend his 2017 tax cuts. Credit-rating firm Moody's last week stripped the US government of its top-tier credit rating, citing the nation's growing debt. 'The fiscal debt story is one that's not only underpinning gold, platinum and silver, but also copper and simply tangible assets in general,' said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. 'This tax cut in the US, if extended, would basically dig an even bigger hole in their budget, making it even riskier to hold US bonds.' Copper touched its strongest price in six weeks last week at $9,664, bolstered by a 90-day pause agreed by China and the US on most of their tit-for-tat tariffs, but that optimism was fading, Hansen added. 'It's not really an inspirational market right now. I think we are most certainly in a wait-and-see mode, so that could cap the upside in the short term.' The most-traded copper contract on the Shanghai Futures Exchange rose 0.3% to 78,100 yuan ($10,839) per ton. The US dollar fell on Wednesday, extending a two-day slide against major peers, making greenback-priced commodities less expensive for buyers holding other currencies. 'Technically, copper has found strong support at $9,500 per ton, and in the near term, prices are targeting the $9,950 per ton mark, barring any significant negative macroeconomic surprises,' said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm. Lead slipped 0.5% to $1,970.50 a ton after on-warrant LME inventories soared by 75% to 216,175 tons. Among other metals, LME aluminium dipped 0.1% to $2,468.50 a ton, nickel lost 0.1% to $15,510, zinc gave up 0.7% to $2,692 and tin fell 0.5% to $32,905.
Khaleej Times
21-05-2025
- Business
- Khaleej Times
As gold pauses, is platinum ready to shine for investors?
As gold continues to scale back towards record highs after a pause last week, investors may see an opportunity in another precious metal — platinum. Platinum, an almost forgotten semi-industrial metal, has been struggling for momentum for years now. However, recently it has been in the process being boxed into a tightening range, which sooner or later will yield a breakout, analysts say. Platinum, primarily mined in South Africa while attracting most of its demand from the production of catalytic converters and laboratory equipment, trades historically cheap, not least compared with gold, which, supported by strong central bank demand since 2022, has seen its value over platinum rise to hit a peak a month ago of 3.6 ounces of platinum to one ounce of gold. Since then, the ratio has narrowed to around 3.2, with platinum gaining five per cent while gold has lost close to six per cent, with the white metal benefiting from the 90-day US-China trade truce, brightening the economic outlook. Gold, for the same reason, has seen its haven appeal deflate, triggering some profit-taking. 'Eventually, the narrowing trading range — which is currently being challenged to the upside — will yield a breakout, and only then are we likely to see whether demand from technically focused traders looking for fresh momentum will be enough to push prices higher, or whether gold's appeal as the ultimate safe haven remains too strong,' Ole Hansen, Head of Commodity Strategy, Saxo Bank, said in a note. Having traded sideways for the past decade, averaging $955 per troy ounce during this time, a change will require a breakout, and for that to happen, analysts are focusing on resistance around $1,012, which is being tested and challenged today, and ultimately on the shown downtrend from 2008, which this May on a monthly close is located around $1,025. The positive sentiment being supported by fundamental news after the World Platinum Investment Council, in their latest Platinum Quarterly report, forecast a deepening market deficit with supply outstripping demand by close to one million troy ounces. This marks the third successive year where above-ground inventories are being drawn in order to meet demand from the automotive sector, and not least a resurgence in Chinese demand for jewellery, bars, and coins, culminating last month when Chinese jewellers and investors imported the largest amount in a year, due to its relative stability and mentioned cheapness compared to gold, Hansen said. In the meantime, speculators in the COMEX futures market, which according to CTFC's widest definition used in their weekly Commitment of Traders report, are managed money accounts such as hedge funds, and other reportables unsurprisingly, given the lack of direction — continue to trade platinum with a neutral to a small long bias. Meanwhile, longer-term focused investors using platinum-backed ETFs registered in the West currently hold 3.18 million troy ounces according to data compiled by Bloomberg, up from an April 2024 low at 2.89 million, but well below the 2021 peak near 4 million ounces. The London Platinum Week 2025, organised by the London Platinum and Palladium Market (LPPM), is being held this week, and it may lead to some additional attention, as it brings together stakeholders such as mining companies, refiners, traders, analysts, and service providers to discuss industry developments and future strategies.
Yahoo
20-05-2025
- Business
- Yahoo
Oil Prices Drop as U.S. Loses Top AAA Rating
Oil prices fell on Monday after the last of the big three credit rating agencies, Moody's, downgraded its rating on the United States from AAA to Aa1, reigniting concerns about America's economy and bond markets. Moody's Ratings on Friday downgraded the long-term issuer and senior unsecured ratings of the U.S. to Aa1 from Aaa and changed the outlook to stable from negative. The one-notch downgrade 'reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns,' said Moody's, which was the last agency to hold the top triple A rating on the U.S. As a result of the downgrade, market sentiment soured on Monday with a broad pullback from U.S. assets and riskier assets including crude oil. As of 7:27 a.m. EDT on Monday, the U.S. benchmark, WTI Crude, was down by 1.23% at $ 61.75, while the international benchmark, Brent Crude, traded 1.19% lower at $64.64 per barrel. 'Moody's downgrade, adding renewed focus on US fiscal debt problems, and Scott Bessent's warning that some tariffs may return to "Liberation Day" levels, have hurt risk sentiment in early Monday trading with USD and crude oil falling,' Ole Hansen, Head of Commodity Strategy at Saxo Bank, commented on Monday. 'Crude's rollercoaster ride to nowhere continues within an established wide range as traders' focus continues to alternate between ample supply and tariff-related demand worries, and the prospect of lower production from high-cost producers, US-Iran talks, and other geopolitical tensions,' Saxo Bank said in a note today. The U.S.-Iran nuclear talks and the expected Trump-Putin call later on Monday are also drawing the attention of the oil market early this week. The U.S.-Iran talks on a nuclear deal 'will lead nowhere' if the United States continues to insist that Iran halt uranium enrichment, Majid Takht Ravanchi, Iran's Deputy Foreign Minister for Political Affairs, said on Monday, after U.S. special envoy Steve Witkoff told ABC News this weekend that Iran's enrichment activity is 'one very, very clear red line' for the United States. By Tsvetana Paraskova for More Top Reads From this article on
