A pumpjack stands near storage containers on the site of an oil well outside Williston, North Dakota, U.S. (Photographer: Daniel Acker/Bloomberg)

What to Watch in Commodities: Iran Deadline, Oil, Gold, Arcelor

(Bloomberg) -- Energy matters will dominate proceedings for commodity investors this week. It’s the last few days before U.S. sanctions on Iranian oil flows snap back into place on Nov. 4, the Khashoggi affair isn’t yet concluded, and earnings season is in full swing. With oil leading gainers among raw materials this year, there’ll be reports from BP Plc, Royal Dutch Shell Plc, Exxon Mobil Corp. and Chevron Corp., as well as Asian heavyweights.

The big hitters in metals will be out in force, too. In gold, the London Bullion Market Association is meeting in Boston to weigh the outlook just as festival season in India provides a litmus test for demand. For base metals, the world’s top miners hit Melbourne to address a major conference and assess policy. And among the other earnings highlights, watch for numbers from agriculture trader Bunge Ltd. on Wednesday and steel giant ArcelorMittal the day after.

Before getting stuck in, a couple of other items demand a mention. In the U.S., it’s the final stretch before the Nov. 6 midterms, with control of Congress up for grabs. The trade war with China may feature as an issue on the stump. And finally, former army captain Jair Bolsonaro just swept to victory in Brazil’s presidential election, marking a pivot to the right that promises to open up the resource-rich economy. Early signs showed investors applauding the result.

Six of the Best

Crude leads the gainers this year among raw materials, and that means Big Oil has a pleasant problem to confront: how to spend all that extra cash. In Europe, BP will report third-quarter earnings on Tuesday, with investors looking for details on assets sales of about $6 billion to fund new buybacks. Shell follows on Thursday, with a key focus being Chief Executive Ben van Beurden’s commitment to a capital budget of $25 billion to $30 billion.

What to Watch in Commodities: Iran Deadline, Oil, Gold, Arcelor

Over in the U.S., Exxon and Chevron will be hoping to bounce back after a rocky first half. Exxon, which has missed earnings estimates the last three quarters, will have to show how it plans to arrest alarming short-term production declines while Chevron investors will be hoping for more than last quarter’s mediocre buyback. And in Asia, expectations will be high for earnings from China’s top producer PetroChina Co. on Tuesday, while refiner China Petroleum & Chemical Corp. provides further details on the same day.

Precious Thoughts

After a torrid run, bullion perked up in the past month by refreshing its role as a haven, and this week will provide signposts on what may come next. Members of the London Bullion Market Association are meeting in Boston through Tuesday, and among the hot topics to be discussed is the prospect of using blockchain and other technology to stop the trading of so-called “blood gold,” or the metal used as a financing tool for South American guerrillas, armed African rebels and drug traffickers.

What to Watch in Commodities: Iran Deadline, Oil, Gold, Arcelor

At the same time investors will have an eye on the bazaars of India, the world’s second-biggest market, with buyers heading to the shops for Dhanteras, the most auspicious gold-buying day of the year, which falls on Nov. 5. Just when jewelers were expecting demand to sparkle ahead of the festival of Diwali, local prices have jumped to a two-year high. Also of note, the World Gold Council releases its quarterly review of global trends on Thursday.

Navigating the Trade War

Bunge’s third-quarter earnings due Wednesday may provide investors and market watchers with a fresh view of how one of the world’s biggest agricultural traders and its competitors are navigating the trade war between the U.S. and China. Last quarter was particularly important for Bunge, the world’s largest soybean processor. The White Plains, New York-based company has promised investors that it’s second-half performance will be better than it’s lackluster first-half.

What to Watch in Commodities: Iran Deadline, Oil, Gold, Arcelor

Its shareholders are antsy. On Oct. 8, Bunge, the subject of takeover speculation over the past year, said that it’s been engaged in dialogue with D.E. Shaw and Continental Grain Co. “with the objective of enhancing shareholder value.”

Feeling the Pinch

ArcelorMittal will report earnings on Thursday amid growing signs the steel industry is starting to feel the pinch from global trade tensions inflamed by U.S. President Donald Trump. Last week, Voestalpine AG, Austria’s biggest producer of the metal, cut its profit outlook for this year and next.

For related news stories, see:
  • Horrible Day for Steelmakers as Trade and Car Concerns Mount
  • Essar Lenders Pick Arcelor Winner as Founders Put Roadblock

There is concern ArcelorMittal may suggest that the final quarter will be more difficult as new emission-testing rules add to uncertainty over demand from Europe’s automotive sector. Shares of the world’s biggest steelmaker slumped this month.

Miners Mingle

Top mining executives will mingle and debate the outlook in Australia this week amid a pullback in both commodities and industry share prices in 2018. The 27-member International Council on Mining and Metals, which includes Glencore Plc and Vale SA, meets Tuesday in Melbourne -- home of sector leader BHP Billiton Ltd. -- for a twice-a-year forum.

What to Watch in Commodities: Iran Deadline, Oil, Gold, Arcelor

The city also hosts a three-day International Mining and Resources Conference through Thursday, with speakers including Anglo American Plc CEO Mark Cutifani. Rio Tinto Group CEO Jean-Sebastien Jacques, Goldcorp Inc. CEO David Garofalo and Fortescue Metals Group Ltd. CEO Elizabeth Gaines are among executives scheduled to join Bloomberg TV for interviews from the event.

Bulls Versus Bears

Sentiment is improving in the gold market as global equity turmoil and geopolitical tension in the Middle East fuel haven demand. About 69 percent of traders and analysts were bullish on the metal, the most since April.

What to Watch in Commodities: Iran Deadline, Oil, Gold, Arcelor

Copper traders were split as prices posted their fourth weekly loss in five, while natural gas analysts were divided amid prospects for warming weather and a stockpile crunch. In the agricultural markets, sentiment on soybean was the most bearish in five weeks, while traders leaned bearish on corn and sugar, and were split on wheat. Terminal subscribers can see the other commodity surveys here.

For the Diary

MONDAY, Oct. 29:

  • World Trade Organization’s dispute settlement body considers U.S. request to investigate possible violations related to China’s intellectual property policies, in Geneva.
  • USDA data for grain-export inspections, crop-progress report
  • Japan Iron and Steel Federation chairman briefing
  • Brazil Datagro sugar-ethanol conference, Sao Paulo, through Tuesday. Participants include Sucden, Cosan
  • Macquarie Bank Roundtable on Future of Infrastructure, New York
  • EARNINGS: Angang Steel Co., Baosteel Iron & Steel Co., Jiangxi Copper Co., Jiangxi Ganfeng Lithium Co., China Molybdenum Co., Zhejiang Huayou Cobalt Co., Komatsu Ltd., First Quantum Minerals Ltd.

TUESDAY, Oct. 30:

  • Intl Mining & Resources Conference, Melbourne, through Thursday. Speakers include Fortescue Metals Group Ltd. CEO Elizabeth Gaines, Newmont Mining Corp. CEO Gary Goldberg, Goldcorp Inc. CEO David Garofalo, BHP Billiton Ltd. CCO Arnoud Balhuizen, Gold Fields Ltd. CEO Nick Holland, Newcrest Mining Ltd. CEO Sandeep Biswas
  • North Sea benchmark December loading programs
  • Japan copper alloy product output for September
  • Singapore International Energy Week, through Friday. Executives from Siemens AG, Tellurian Inc. due to speak at Singapore Energy Summit
  • Deloitte Oil & Gas Conference, Houston
  • U.S. Commerce Dept. scheduled to announce final determination in China alloy aluminum dumping case
  • EARNINGS: BP Plc, Anadarko Petroleum Corp., Peabody Energy Corp., SunPower Corp., PetroChina Co. Ltd., China Petroleum & Chemical Corp., Mitsui & Co., Huadian Power International Corp., China Longyuan Power Group Corp., GD Power Development Co., Tokyo Electric Power Co., JFE Holdings Inc., Kobe Steel Ltd., Tongling Nonferrous Group Co.

WEDNESDAY, Oct. 31:

  • EIA’s Monthly Crude Oil and Natural Gas Production report
  • Genscape weekly ARA crude stockpiles report
  • Cargo surveyors AmSpec, Intertek, SGS data on Malaysia’s October palm oil exports
  • EIA oil inventories
  • EARNINGS: Repsol SA, OMV AG, Bunge Ltd., Suncor Energy Inc., Enbridge Inc., HollyFrontier Corp., Hess Corp., Entergy Corp., Warrior Met Coal inc., China Nuclear Engineering Corp., Adani Enterprises Ltd., Tokyo Gas Co.
  • PRODUCTION REPORTS: Origin Energy Ltd., Impala Platinum Holdings Ltd.

THURSDAY, Nov. 1

  • World Gold Council quarterly global demand trends report for July-September
  • UN FAO Food Price Index
  • USDA weekly figures for crop net-export sales
  • PJM fuel security study
  • U.S. EIA weekly U.S. gas inventory report
  • Russian refining maintenance schedule from ministry
  • EARNINGS: Royal Dutch Shell Plc, DNO ASA, ArcelorMittal, Ingredion Inc., Pilgrim’s Pride Corp., Saputo Inc., Dominion Energy Inc., Exelon Inc., Westmoreland Coal Co., SolarEdge Technologies Inc., EOG Resources Inc.
  • PRODUCTION REPORTS: Sibanye Gold Ltd., Centamin Plc

FRIDAY, Nov. 2:

  • Monthly U.S. jobs report. Payrolls rose about 190,000, while unemployment held at 48-year low of 3.7%, analysts forecast
  • Baker Hughes rig count
  • ICE weekly commitments of traders report for Brent, gasoil
  • CFTC weekly commitments of traders report on futures and options
  • U.S. Census oil export data for September
  • EARNINGS: Exxon Mobil Corp., Chevron Corp., Duke Energy Corp., Itochu Corp., Marubeni Corp., Nippon Steel & Sumitomo Metal Corp.

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