Palm Oil Falls; Trump Delayed China-Specific Tariffs Could Lend Support — Market Talk

Iron ore falls in early Asian trade and Baocheng Futures expects prices to remain volatile. China's commodity demand this year could be challenged by the extent of U.S. tariffs and subsequent policy response from Chinese policymakers, says Commonwealth Bank of Australia analyst Vivek Dhar in a note. However, given that China's fiscal spending may look to offset any economic damage from U.S. tariffs, Dhar sees the possibility of a "flat to small decline" in China's steel demand and production. The most-traded iron-ore contract on the Dalian Commodity Exchange is down 0.9% at CNY796.5 a ton.(amanda.lee@wsj.com)

Gold rose toward $2,750 per ounce on Wednesday, extending a more than 1% gain from the previous session to reach its highest level since early November of last year.

The metal has been supported by a relatively softer US dollar and growing demand for the safe-haven asset, as concerns over trade wars lingered following President Trump's announcement of potential tariff policies.

Trump pledged to impose tariffs on the European Union and reiterated his consideration of a 10% tariff on China, following his earlier statement about prospects of imposing hefty levies on Canada and Mexico.

Meanwhile, traders continued to assess inflation risks, as Trump’s policies were broadly seen as inflationary, potentially prompting the Federal Reserve to keep interest rates elevated for an extended period to control price pressures.

This could dampen gold’s appeal, as higher rates increase the opportunity cost of holding non-yielding assets.

Brent crude oil futures traded around $79 per barrel on Wednesday, extending losses from recent sessions after US President Donald Trump reiterated his consideration of a 10% tariff on China, a top oil consumer.

This amplified trade war concerns, following his statement a day earlier about potentially imposing hefty levies on Canada and Mexico.

Markets also continued to assess the implications of Trump's pledges to boost oil production by declaring a national energy emergency to ease permitting, open up acreage, and reverse Biden-era clean energy policies.

Meanwhile, recent US sanctions on Russia have disrupted physical oil and tanker markets, offering some carryover support to oil prices.

Elsewhere, a winter storm swept across the US Gulf Coast on Tuesday, with North Dakota's oil production falling by 130 thousand to 160 thousand bpd, according to the state's pipeline authority.

WTI crude oil futures traded below $76 per barrel on Wednesday, extending losses from recent sessions after US President Donald Trump reiterated his consideration of a 10% tariff on China, a top oil consumer.

This amplified trade war concerns, following his statement a day earlier about potentially imposing hefty levies on Canada and Mexico.

Markets also continued to assess the implications of Trump's pledges to boost oil production by declaring a national energy emergency to ease permitting, open up acreage, and reverse Biden-era clean energy policies.

Meanwhile, recent US sanctions on Russia have disrupted physical oil and tanker markets, offering some carryover support to oil prices.

Elsewhere, a winter storm swept across the US Gulf Coast on Tuesday, with North Dakota's oil production falling by 130 thousand to 160 thousand bpd, according to the state's pipeline authority.

Gold is steady in the early Asian session, underpinned by the dollar's weakness, which makes the precious metal cheaper for potential buyers that hold other currencies. Gold seems to be benefiting from the dollar's decline, says Matthew Weller, global head of Research at FOREX.com and City Index, in an email. After the bullish breakout from the November-December symmetrical triangle pattern, gold buyers may now be shifting their focus upward for a retest of record highs near $2,790/oz in coming days, Weller says. Spot gold is little changed at $2,743.38/oz. (ronnie.harui@wsj.com)

The flaring of natural gas at U.S. oil fields is unlikely to increase even if Donald Trump revokes rules created during the Biden administration to reduce methane emissions, says Brian Williams, a managing partner at investment bank Carl Marks & Co. who focuses on the energy industry. He adds that oil companies today often have the option of feeding natural gas produced alongside crude into pipelines, which enables them to sell the fuel in the market. "Over the last decade, significant infrastructure has been built so that you can just capture whatever gas you produce instead of just taking it to flare like in the initial days," he says. "Now that the infrastructure is in place to gather and sell the gas, it makes economic sense to do that." (luis.garcia@wsj.com; @lhvgarcia)