IEA Lifts 2025 Oil-Demand Forecast But Expects Growth to Remain Subdued -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is flat at $73.53 a barrel.

--European benchmark gas is down 3.1% at 43.33 euros a megawatt-hour.

--Gold futures are down 0.5% at $2,743.00 a troy ounce.

--LME three-month copper futures are down 0.1% at $9,164.50 a metric ton.

TOP STORY:

IEA Lifts 2025 Oil-Demand Forecast But Expects Growth to Remain Subdued

The International Energy Agency lifted next year's oil-demand estimates citing the impact of China's stimulus measures, but said the pace of growth is expected to remain subdued.

The Paris-based organization now forecasts global demand to grow by 1.1 million barrels a day in 2025 from 990,000 barrels a day previously. Estimates for this year were instead cut to 840,000 barrels a day from 921,000 barrels a day, largely due to lower-than-anticipated deliveries in China, Saudi Arabia and Indonesia.

Both forecasts are considerably lower than last year's growth of more than 2 million barrels a day, reflecting a weaker macroeconomic environment and shifts in oil consumption. The agency's projections also remain substantially below those of OPEC, which still sees demand growth at robust levels of 1.61 million barrels a day this year and 1.45 million barrels a day the next.

OTHER STORIES:

Gold Prices Set to Climb at Modest Pace if Market Conditions Persist in 2025, WGC Says

Gold prices are likely to climb at a more measured pace in 2025 if market conditions hold steady, according to the World Gold Council.

In its 2025 gold outlook, the industry body said that if the economy performs according to market-consensus expectations gold prices should rise at a more modest rate than this year. Gold has potential for upside if central-bank demand proves stronger-than-expected or if a rapid financial deterioration drives safe-haven demand--though a reversal of the interest rate cutting cycle would bring challenges.

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Drax to Sell Biomass Pellets to Pathway Energy for Sustainable Aviation Fuel Project

Drax agreed to sell biomass pellets to Pathway Energy for use at the company's planned sustainable aviation fuel plant on the U.S. Gulf Coast.

The U.K. renewable energy company said Thursday that it had agreed terms with Pathway to supply over 1 million tonnes of sustainable biomass pellets each year. Drax did not provide financial details of the agreement.

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Chinese Solar Stocks Shrug Off New U.S. Tariffs

Chinese solar stocks largely shrugged off new U.S. tariffs on imports of China-made solar wafers and polysilicon, key materials used in manufacturing solar cells.

Shares of Jinko Solar and GCL System Integration Technology were down less than 1% at the mid-day break in China trading, while Trina Solar, JA Solar Technology, LONGi Green Energy Technology, Risen Energy and Shanghai Aiko Solar Energy had all gained ground.

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Agnico Eagle Mines to Buy O3 Mining in C$204 Million Deal

Agnico Eagle Mines has agreed to buy smaller gold-mining peer O3 Mining in a cash deal valued at about 204 million Canadian dollars (US$144.2 million).

Agnico on Thursday said it will pay C$1.67 a share for O3, a nearly 58% premium to Wednesday's closing price of C$1.06.

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Austria's OMV Ends Natural-Gas Supply Contract With Gazprom Export

Austrian energy company OMV terminated its long-term supply contract for natural gas with Russian Gazprom Export with immediate effect.

The company on Thursday said it no longer has any supply contracts with any business in Russia and since Nov. 16, no deliveries of natural gas were made by Gazprom Export.

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SSAB Signs Deal to Use Scrap Metal for Steel Making

Swedish steelmaker SSAB has entered a strategic cooperation that will see it receive scrap metal from recycling company Stena Metall.

The agreement means recycled scrap metal will be delivered to SSAB's new electric arc furnace in Oxelosund, Sweden, and be used to produce steel made with minimal carbon-dioxide emissions.

MARKET TALKS:

Agricultural Markets Face a Challenging 2025 -- Market Talk

1217 GMT - Global agricultural markets face some uncertainties next year amid tariff disputes and climate challenges, according to Rabobank's Carlos Mera. U.S. tariffs targeting goods from China, Mexico and Canada under Trump's presidency would threaten to squeeze margins for farmers--particularly those producing major grains and oilseeds, which have already seen price declines this year, the head of Agri Commodity Markets Research says. Meanwhile, Ukraine's agricultural exports are expected to decline due to low stock levels at the start of the season and labor shortages, while warmer temperatures are hitting production in low latitudes, with projections indicating significantly negative effects on corn yields. ([e-mail])

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Anglo American's Share Price to Rise on Divestment of Non-Core Assets -- Market Talk

1128 GMT - Anglo American's share price is likely to rise as the miner continues to divest non-core assets, analysts at Citi say. The diversified miner has already executed the most pressing part of its restructuring plan via the sale of its metallurgical coal assets at a higher price than expected, the analysts write. Investor confidence in the plan, and a subsequent re-rating of the stock, is likely to improve on its disposal of Anglo American Platinum, which it expects to complete in mid-2025, as well as the sale of its diamond and nickel business, they add. Anglo American has made good progress with the delivery of $1 billion in cost savings and has plans to save at least an additional $800 million, the analysts write. Anglo American shares trade 0.2% up at 25.55 pounds. ([e-mail])

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BHP's Copper Production Highs Will Be Hard to Maintain -- Market Talk

1128 GMT - BHP faces the challenge of maintaining copper production near historical highs amid declining ore grades, rising costs and significant investment requirements, Citi analysts say. The miner will have to spend heavily to replace its aging Los Colorados facility in Chile and invest in leaching technologies to boost production, the analysts writes in a note. BHP continues to simplify its core business. Its exit from petroleum assets should allow the company to focus on large-scale iron ore, copper, potash and metallurgical coal assets, the analysts write. Shares trade down 0.5% at 41.79 Australian Dollars.([e-mail])

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Diversified Mining Investors to Focus on Capital Discipline in 2025 -- Market Talk

1101 GMT - Throughout 2025, investors are likely to reward diversified mining companies that demonstrate capital discipline, Citi analysts write in a research note. The outlook for the sector will hinge on the timing and magnitude of financial stimulus in China, and the severity of a potential global trade war, they note. In this context, investors are increasingly wary of companies with significant capital expenditure plans which don't deliver near-term production growth, the analysts write. This includes spending on copper assets. This year, copper assets have been a key merger & acquisition target due to soaring demand for the metal which is pivotal to the energy transition. Glencore and Anglo American are Citi's prefered diversified mining stocks going into 2025. Glencore shares trade up 0.6% at 3.86 pounds while Anglo American shares rise 0.2% to 25.55 pounds. ([e-mail])

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Europe's Gas Prices Drop on Milder Weather Forecasts -- Market Talk

1104 GMT - European natural-gas prices drop in afternoon trade as forecasts of milder temperatures provide some relief to the market. The benchmark Dutch TTF contract is down 3.3% to 43.22 euros a megawatt hour after recently topping 49 euros a megawatt hour. "Risk to European gas prices will skew to the upside if weather turns colder," ANZ Research analysts say. "Market balance remains delicate, with the expiration of the transit deal between Ukraine and Russia by the year end." EU storage was 80.88% full as of Tuesday, below the seasonal five-year average of 84%, according to industry group Gas Infrastructure Europe. ([e-mail])

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Oil Broadly Flat Amid Demand Weakness, New Sanctions Against Russia -- Market Talk

1054 GMT - Oil prices are broadly stable as bearish demand trends offset support from tougher sanctions against Russia. Brent crude and WTI are flat at $73.52 and $70.30 a barrel, respectively. EU ambassadors agreed on a new package of sanctions against Russia, targeting the so-called "shadow fleet" the Kremlin has been using to trade oil. The U.S. is also looking to reduce Russia's oil revenue, Treasury Secretary Janet Yellen said, adding that lower demand for oil creates an opportunity for more sanctions. Meanwhile, the IEA raised its oil demand forecast for next year but said the pace of growth remains subdued and OPEC+'s decision to extend output cuts won't prevent an oil glut. ([e-mail])

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Palm Oil Ends Higher Amid Supply Concerns -- Market Talk

1009 GMT - Palm oil ended higher amid supply concerns. This, coupled with the anticipated implementation of the B40 biodiesel mandate in Indonesia, continue to support elevated crude palm oil levels, OCBC analysts said in a research note. However, softer demand in key consuming markets such as China and India have partially offset price gains, they noted. OCBC thinks CPO, whose prices have risen 40% this year, is no longer among the cheapest vegetable oils. The bank expects prices to hover around current elevated levels in 1Q 2025 before normalizing from 2Q 2025 onwards, with 4,000 ringgit serving as a strong support level. The Bursa Malaysia Derivatives contract for February delivery rose 64 ringgit to 4,920 ringgit a ton. ([e-mail])

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Gold Futures Correct Lower But Stay Elevated on Safe-Haven Demand -- Market Talk

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12-12-24 0748ET