Commodities: Energy futures hammered as investors call time on risk rally

Energy futures were hammered at the start of the week on the back of the latest weekly oil rig count data showing the first increase of 2019.

According to oil consultancy group Baker Hughes, the number of onshore US oil rigs rose by 10 to reach 862 over the week ending on 25 January.

That saw front month Brent crude oil futures dive 2.82% to trade at $59.90 per barrel on the ICE, alongside a 3.84% drop in the February gasoline contract on NYMEX to $1.3360 a gallon, although it was natural gas that was faring worst, retreating by 7.93% to $2.93/MMBtu in New York trading.

As of 2001 GMT, the Bloomberg commodity index was down by 1.48% at 79.87, even as the US dollar spot index drifted lower by only 0.12% to 95.6810.

To take note of, investors were also waiting on the results of a raft of key risk events scheduled for throughout later in the week, including trade talks between Washington and Beijing, a US central bank policy meeting, another key Brexit vote in the UK and key data releases on Friday.

Included among the latter were manufacturing sector survey results in China and the States and the monthly US non-farm payrolls report.

Investors were especially against that backdrop given the recent rally in risk assets.

Over in base metals meanwhile, three-month LME copper declined from $6,069 per metric tonne at the session open to finish at $6,002, weighed down by poor sentiment around the People's Republic of China.

Overnight, the National Bureau of Statistics had posted a 1.9% year-on-year drop in industrial profits for December.

Aluminium futures on the other hand slipped from $1,903 per tonne at the open to $1,867 as Washington officially lifted sanctions the world's largest aluminium-maker, Russia's Rusal.

Out among the soft commodities, ICE-traded March cocoa was again higher, adding 1.12% to $2,250 per metric tonne, but cotton#2 on ICE was down by 0.38% to $0.7385 a pound.