Many now view the prospect of Iraq’s oil export shipments being disrupted by the present unrest in the north of country as unlikely. Around three-quarters of the country’s oil production is in the south of Iraq and all of its crude exports (not including those from the semi-autonomous Kurdish region) are handled at its southern export facilities, far away from the current fighting.
Iraq’s oil ministry in fact recently indicated oil exports would accelerate this month (July) compared to an average 2.5 million bpd in June and 2.58 million bpd in May (oil ministry data), although a figure for July was not provided.
U.S. crude prices also came under further pressure with the benchmark West Texas Intermediate (WTI) for August delivery on Nymex closing at $102.29 a barrel on July 9, down $1.48 on last week’s finish and its weakest level since mid-May.
The U.S. Energy Information Administration (EIA) in its weekly report on July 9 indicated a 2.4-million barrel decline in the country’s crude inventories for the week ending July 4, a bigger fall than the market had expected. But this positive news was offset by an increase in stocks at the key Cushing, Oklahoma, storage hub, during the same week.
Cushing is the delivery point for Nymex crude futures. The EIA also reported U.S. crude oil production reached over 8.5 million barrels a day during the week to July 4, the highest output since October 1986.
Cocoa slips on European grind data & increased supplies
Among softs, cocoa futures in London hit one-month lows on disappointing European grind data, which is seen as a measure of demand, while cocoa prices on New York’s ICE Futures U.S. exchange eased back from recent near three-year highs.
Cocoa for delivery in September dipped to £1,897 a pound – the weakest since late May – on the NYSE Liffe exchange after the Brussels-based European Cocoa Association European on July 10 reported grind data for the three-month period to June 30 came in at 307,938 tonnes, down 0.7 percent year-on-year. The market had anticipated for volumes to be at least flat.
Cocoa futures in both London and New York have been trading near 3-year highs as recently as last week , supported by concerns that global cocoa production will lag behind demand. Increasingly now more market players and analysts are forecasting a small surplus in world cocoa supply this season (Oct. 1, 2013-Sept. 30, 2014).
Previously a small global deficit had been widely expected in 2013-2014 – and some market watchers are holding on to this expectation. The about-turn follows good rains in West Africa which have boosted output of the region’s mid-crop harvest which typically runs April through September. Previously, a small global deficit had been widely expected in 2013-2014.
Switzerland-headquartered chocolate and cocoa products manufacturing giant Barry Callebaut is the latest player now be to be expecting a slight global deficit this season.
“A good start to the mid-crop cocoa harvest, further helped by record rainfalls in the West African region could turn an expected deficit for the 2013-2014 season into a slight surplus,” Barry Callebaut said in its nine-month sales for fiscal 2013-2014 released late last week.
In June, the International Cocoa Organization in London revised the 75,000-tonne deficit it forecast in May for 2013-2014 to a 30,000-tonne surplus. Analysts and market players are now starting to assess how the global supply/demand balance for the 2014-2015 cocoa year will play out; cocoa production has been widely expected to fall short of demand in 2014-2015.
Cocoa for September delivery on ICE Futures U.S. touched an intra session low of $3,055.50 a tonne on July 10, having settled at $3,089.50 the previous day. On 3 July, ICE September hit $3,149 a tonne, the highest since August 2011, underpinned by the tight supply/demand outlook.
