Commodities: Iranian oil shipments rose sharply in April, report says

There was a soft tone to the commodities patch on Thursday as the US dollar strengthened for another session, egged on by the unexpected decision taken by the Monetary Authority of Singapore to shift towards a ‘neutral’ zero per cent rate of appreciation in its currency.

The spot US dollar index edged higher by 0.11% as a result to 94.85, alongside a 0.53% retreat in Bloomberg’s commodity index.

Gold futures for delivery in June 2016 were the main victim of the Greenback’s strength and were off by 1.74% on COMEX as of 18:55BST, changing hands at $1,226.70 per troy ounce.

“This is not a policy to depreciate the domestic currency, and only removes the modest and gradual appreciation path of the S$NEER policy band that was in place,” the island state’s central bank said in a statement.

However, some analysts were sceptical, musing aloud about whether the move heralded a weaker medium-term outlook further afield.

Many currencies in the Asia Pacific moved lower in tandem overnight, with the People’s Bank of China opting to set a 0.46% lower daily fix for the yuan.

Front month Brent crude futures gained even in the face of the rise in the dollar, rising by 0.226% to finish the session at $44.28 per barrel on the ICE.

Gains in black gold came on the heels of a bullish report from the International Energy Agency, which forecast that the glut of oil on world markets would be close to eliminated in the second half of 2016.

Traders were also expectant – and some wary – ahead of the 17 April meeting of several of the world’s major oil producers in Doha, Qatar to try and agree to freeze their output of crude.

“It is common knowledge that oil prices have partly contributed to the resurgence of global stocks, but if the Doha meeting on Sunday disappoints, both oil and stock markets may sink like a stone,” said FXTM research analyst Lukman Otunuga.

To take note of, oil futures were also on the up despite tanker tracking data from Bloomberg which revealed a more than 600,000 barrel a day increase in Iran’s shipments this month.

Nonetheless, market chatter was that it remained to be seen whether such an increase could be sustained.

Industrial metals were generally weaker, three-month copper futures on the LME ended the day lower by 0.3% to $4,820 per metric tonne.

Three-month nickel drifted 0.3% lower to $8,962.50 per metric tonne on the LME while zinc surrendered a more hefty 1.9%, with the three-month contract closing at $1,854 per metric tonne.

Soft commodities were one bright spot in the market, with white sugar futures up by 2.3% to $421.30 per metric tonne on LIFFE, while cocoa futures rose 1.5% to £2,197 per metric tonne.