Commodities: Crude lower as markets anticipate inventories data, Fed rate call

Crude-oil futures were lower on Tuesday afternoon as markets anticipated two sets of US inventories data due this week, and the US Federal Reserve's interest-rate call on Wednesday.

Markets were awaiting the stores data from the industry's American Petroleum Institute late on Tuesday, followed by the government US Energy Information Administration figures on Wednesday.

At 15:18 BST, Nymex-priced West Texas Intermediate crude was down 0.25% to $48.72 a barrel. Intercontinental Exchange-traded Brent was down 0.02% to $51.51 a barrel.

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said oil's fall was on news that Libyan output recovered to the highest levels in three years.

Other data showed that US producers added nine oil rigs last week, pushing the total to the highest level since April 2015.

"In this context, Opec's efforts to limit production to sustain prices are increasingly less efficient," said Ozkardeskaya.

"The downside prevails, as the $47 could be thought as a reasonable target for sellers. The upside risk would be an unscheduled announcement from the OPEC members to halt the bleeding and/or softer expansion in US oil inventories (due on Wednesday)."

Michael Hewson, chief market analyst at CMC Markets UK, said crude prices had struggled to shrug off concerns about rising US output as rig counts rose again for the 15th week in a row, while data showed that Russian oil output continued to decline in April.

"While we saw a rally in prices early on today any rebound could struggle to gain traction unless there is firm evidence that Opec and non-Opec members are able to agree on extending the output cap until the end of this year, when they meet later this month."

On Comex, gold was up 0.04% to $1256 an ounce. Silver up 0.26% to $16.89 an ounce, and copper fell 0.88% to 263.70 cents a pound.

FXTM research analyst Lukman Otunuga said gold bulls had succumbed to selling pressure by losing the battle to defend the $1260 support.

"While the metal could still be supported by risk aversion in the medium to longer term, the break below $1260 may entice sellers to send prices towards $1240," said Otunuga.

"The metal may be subject to volatility this week with the Federal Reserve meeting on Wednesday, and NFP on Friday acting as prime drivers."

Otunuga said that, from a technical standpoint, previous support around $1260 might transform into a dynamic resistance that opened a path towards $1240.

"In an alternative scenario, a daily break back above $1260 could provide bulls the opportunity to challenge $1280," he said.

Hewson commented that gold prices had continued to look weak, drifting back towards the 200 day MA a level it broke above last month on the 11th April.

"The slightly more positive risk environment along with firmer US yields ahead of tomorrow's Fed meeting is helping undermine prices," he said.

On London Metals Exchange, three-month industrial metals were mixed. Zinc rose 1%, copper added 0.76% and tin shed 0.38%. Aluminum dropped 0.65%.