Commodities Update — Gold rises; Corn falls on improving weather prospects; Copper gains on easing Covid restrictions

RIYADH: Oil prices extended gains on Monday as investors stood on guard for any moves against Russian oil and gas exports that might come out of a meeting of leaders of the Group of Seven nations meeting in Germany.

Brent crude futures edged up 22 cents, or 0.2 percent, to $113.34 a barrel by 0342 GMT after rebounding 2.8 percent on Friday. 

US West Texas Intermediate crude was at $107.73 a barrel, up 11 cents, or 0.1 percent, following a 3.2 percent gain in the previous session.

The prospect of more supply tightness loomed over the market as western governments sought ways to cut Russia’s ability to fund its war in Ukraine, even though G7 leaders were also expected to discuss a revival of the Iran nuclear deal — which might lead to more Iranian oil exports.

Producer nations in OPEC+, which includes Russia, will likely stick to a plan for accelerated oil output increases in August when they meet on Thursday, sources said.

Ecuador’s oil output halved

Ecuador’s oil production has fallen by more than half due to road blockades and vandalism connected to nearly two weeks of anti-government protests, the energy ministry said on Sunday.

The sometimes-violent demonstrations by largely indigenous marchers demanding lower fuel and food prices, among other things, began on June 13 and have led to at least six civilian deaths.

President Guillermo Lasso, whose already-adversarial relationship with the national assembly has worsened during the marches, has offered concessions including easing security measures, subsidized fertilizers and debt forgiveness, and his government met on Saturday with indigenous groups.

“Oil production is at a critical level. Today the figures show a reduction of more than 50 percent,” the energy ministry said in a statement. 

He added, “In 14 days of demonstrations, the Ecuadorean state has stopped receiving around $120 million.”

Vandalism, the takeover of oil wells and road closures have prevented the transport of necessary supplies, the ministry said.

Before the protests, oil production was about 520,000 barrels per day.

The public oil sector, private producers of flowers and dairy products, tourism businesses and others have lost about $500 million, the ministry of production said in a statement.

Protesters reiterated on Sunday that marches would continue until Lasso has answered all of their demands.

“The central issues have not been won yet,” said CONAIE indigenous organization leader Leonidas Iza, adding that protesters want guarantees on fuel prices and a limit to the expansion of oil and mining. 

“We are going to return with results.”

Ukraine attacks Crimean oil-drilling platform 

Ukrainian forces have attacked a drilling platform in the Black Sea owned by a Crimean oil and gas company, Tass news agency cited local officials as saying on Sunday, the second strike in a week.

The platform is operated by Chernomorneftegaz, which Russian-backed officials seized from Ukraine’s national gas operator Naftogaz as part of Moscow’s annexation of the peninsula in 2014.

“It’s shelling by the armed forces of Ukraine, there are no casualties,” Tass cited a member of Crimea’s emergency services as saying. 

It gave no further details.

Last Monday Crimean officials said three people were wounded with seven missing after a Ukrainian strike that forced the suspension of work on three platforms. Chernomorneftegaz is under US and European Union sanctions.

(With inputs from Reuters)