Commodities: Oil continues to slide as OPEC seminar nears conclusion

Oil benchmarks continued to trade lower on Thursday, as the OPEC International Seminar neared its conclusion with ministers set to meet formally on Friday.

Market sentiment remained heavily in favour of OPEC holding its production quota at 30 million barrels per day (bpd), which according to published data, it is already flouting by pumping an additional 930,000 bpd. Analysts at Barclays, IG, CMC Markets and a host of other commentators expect no movement on the quota front from OPEC.

At 0856 BST, the Brent front month futures contract for July delivery was down 0.52% or 33 cents at $63.47 a barrel in European trading entrenching overnight losses. The WTI was also trading down 39 cents or 0.65% at $59.25.

Speaking in Vienna, Kuwait’s oil minister Dr Ali Saleh Al-Omair said shale and other technological advancements in extraction techniques meant more oil was coming onstream.

“Developments in the US can be described as a game changer. Furthermore, technological advancements in the shape of enhanced oil recovery mechanisms are also having a positive bearing on supplies.”

Kuwait is said to be backing Saudi calls for maintaining OPEC’s oil production at current levels. An official from the country’s delegation in Vienna told Sharecast on Wednesday that a quota change was “unlikely.”

Away from oil markets, precious metals continued to struggle. COMEX gold fell to a three-week low overnight on improved US data which raises chances of an interest raise. The gold benchmark extended losses in Europe down $1.90 or 0.20% at $1,183 an ounce.

Spot gold was also trading lower by $3.31 or 0.28% at $1,181.86 an ounce. Silver was down 0.49% but platinum was up 0.10%. Meanwhile, the base metals market took a breather from the rout it endured earlier in the week with copper, zinc and lead broadly flat on the London Metal Exchange while aluminium was up 1.1%.

On the agricultural markets front, CBOT corn (down 0.75%), wheat (down 1.27%) and CME live cattle (down 1.00%) contracts turned sharply lower. Concurrently, ICE cotton was down 0.11% while cocoa continued its recovery up 0.42%