0926 GMT - Oil prices are unlikely to hold on to current levels due to Russia's aggressive crude discounting, OPEC+'s spare capacity and a projected global surplus this year, according to MUFG analysts. "Today's oil price strength is not sustainable," they say in a note to clients. Russia has a strong track record of aggressively discounting its oil to attract price-sensitive customers, while OPEC+ sit on around 6 million barrels a day of spare capacity that could withstand any supply tightening threat. Plus, global oil markets are still expected to swing into a supply surplus as non-OPEC+ production returns to growth. "We have not changed our base case for oil prices with Brent in the $65-$80/b range, averaging $73/b in 2025," the analysts say. "Although, these new sanctions skew price risks to the upside in the near-term." (giulia.petroni@wsj.com)
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Oil Supported by U.S. Sanctions Concerns, Inventory Decline -- Market Talk
0901 GMT - Oil prices edge lower, but remain supported by concerns over the effect of U.S. sanctions on Russian flows and a larger-than-expected drawdown in U.S. stockpiles. Brent crude is down 0.2% at $81.89 a barrel, while WTI falls 0.1% to $78.66 a barrel. Both benchmarks continue to hover around five-month highs after resuming their rally in the previous trading session. "The market shrugged off a cease-fire agreement between Israel and Hamas," ANZ Research analysts say. "The conflict has ultimately had little impact on the physical market, although the deal does suggest a wider conflict in the region involving oil producer Iran is less likely." (giulia.petroni@wsj.com)
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Comex Gold Futures' Bullish Momentum Reaccelerating, Chart Shows -- Market Talk
0644 GMT - Comex gold futures' bullish momentum is reaccelerating, RHB Retail Research's Joseph Chai says in a research report. The futures' latest long bullish candlestick reflects gold bulls returning to the "driver's seat," the analyst says. The futures surpassed resistance at $2,700/oz on Wednesday, reaffirming the bullish technical setup, the analyst says. Also, the relative strength index is curving upward, which indicates that bullish momentum is picking up pace again, the analyst says. Premised on this renewed momentum, the precious metal is eyeing a test of next resistance at $2,800/oz, the analyst adds. Spot gold is 0.1% lower at $2,692.76/oz. (ronnie.harui@wsj.com)
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Iron Ore Gains; Strong China Demand Supports Sentiment -- Market Talk
0322 GMT - Iron ore rises in the early Asian trade. Sentiment remains supported by strong import data from China, and continuing decline in steel inventories reflecting the need for higher steel output in the coming months, the ANZ Research team writes in a note. The most-traded iron-ore contract on the Dalian Commodity Exchange is up 0.7% at CNY782.0 a ton. (kimberley.kao@wsj.com)
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Rio Tinto 4Q Iron-Ore Shipments Miss, Copper Output Strong, Says Jefferies -- Market Talk
0200 GMT - Rio's Tinto's 4Q iron-ore output was in line with Jefferies's expectations, although shipments slightly missed, its analysts say in a note. "Notably, the portion of lower quality SP10 ore in the mix continues to increase and was higher than we had expected," they say. Copper production in 4Q significantly beat the bank's expectations, mostly because of an excellent quarter at Escondida, say the analysts. The Oyu Tolgoi mine had a good quarter as well, they say. Jefferies has a buy rating and A$147 target on Rio Tinto. The stock is little changed in Sydney at A$119.46. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
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Oil Rises on Softer-Than-Expected U.S. Inflation Data -- Market Talk
0108 GMT - Oil rises in early Asian trade. The market has made a remarkable rebound this week, primarily supported by positive surprises in U.S. inflation data, Pepperstone's research strategist Quasar Elizundia says. The moderation of core inflation, which was below market expectations, has fueled optimism about a potentially less aggressive stance from the Fed, Elizundia writes in an email. A less restrictive monetary policy could act as a catalyst for short- and medium-term crude demand, Elizundia adds. Front-month WTI crude oil futures are up 0.4% at $80.38/bbl; front-month Brent crude oil futures are 0.5% higher at $82.42/bbl.(amanda.lee@wsj.com)
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
01-16-25 0908ET