Commodities: Crude futures tank as Saudi says OPEC in 'produce as much as you can mode'

Crude oil futures tanked on Tuesday, after Saudi Arabia's energy minister said that the Organisation of Petroleum Exporting Countries and its allies were in "produce as much as you can mode".

His remarks sent Brent crude oil futures for December down by 4.3% to $76.44 a barrel on the ICE.

Speaking at a conference in Riyadh, Saudi oil minister, Khalid Al-Falih, said the Kingdom's output was at 10.7m barrels per day, near an all-time high, and that it could increase it even more if needed to meet any shortfalls in supply as US sanctions against Iran kicked-in.

"We will meet any demand that materializes," Al-Falih reportedly said.

Nevertheless, some analysts continued to see upside for the price of 'black gold'.

According to Morgan Stanley's Chief Cross-Asset strategist, Andrew Sheets, oil prices were likely to head towards $95.0 a barrel towards the middle of 2019, on the back of a lack of spare capacity.

However, in the near-term demand from emerging markets might be dampened as their currencies weaken versus the US dollar, he said in remarks to Bloomberg, as well as by falling refinery runs.

On a related note, and regarding the risk of sanctions against Saudi, City-based traders told WebFG UK that the behaviour of the WTI-Brent spead did not appear to be pointing in that direction.

From a technical standpoint, December Brent finished just atop the bottom part of its upward sloping multi-year price channel, which was to be found towards $76.0 a barrel. Hence, for the moment at least, the current bullish trend was still in play, according to WebFG UK's chief technical analyst, Jose Maria Rodriguez.

To take note of, Rodriguez added, that area of price support was reinforced by Brent's 200-day moving average, which as of Tuesday was running at roughly $73.70 a barrel.

In base metals space meanwhile, three-month copper on LME dipped from $6,216 per metric tonne to $6,196, weighed down by strength in the US dollar.

But overall trading was subdued, with traders citing a lack of any surprises in the latest set of LME stock data or metal-specific news as the reasons for that.

Gold future were a smidgen higher, with the December contract on COMEX dipping by 0.30% to $1,233.20/oz..