Commodities: Nigerian militants to cease attacks, Iraq to increase oil output

Commodity prices came under pressure amid some hawkish central bank rhetoric and as energy futures gave way after an extended run higher, with the latter weighed down by expectations of increased supplies out of Iraq and perhaps also from Nigeria.

Front month West Texas Intermediate was down by 2.934% at $47.71 a barrel on NYMEX after having tacked on 16% over the past seven trading sessions, for their longest winning streak in four years, according to Bloomberg data.

On 21 August, a top Iraqi official said the country’s exports would increase by 150,000 barrels a day as shipments resumed from three fields.

In parallel, reports indicated the main militant group in the Niger Delta had announced a cessation of hostilities.

Also weighing on the energy complex, over the weekend US Federal Reserve vice chairman Stanley Fischer sounded a rather optimistic note, saying that US rate-setters were “close to their targets” for employment and inflation.

Fischer’s remarks initially sent the US dollar higher.

Thus, Bloomberg’s commodity index retreated 0.49% to 85.81 even as those early Fed-inspired gains in the US dollar spot index evaporated in afternoon trading.

By 18:01 BST the dollar index was just 0.05% up on the day at 94.56, having touched an intra-day high of 94.96.

To take note of, in a research note on emerging markets issued on Monday strategists at JP Morgan mused aloud that "the dollar might be ending the bull market it enjoyed for the past few years,” with commodities potentially bottoming-out alongside it.

Three-month LME-traded copper futures skidded 0.8% lower to end the day at $4,760.00 per metric tonne, with similarly-dated nickel futures off by 1.1% to $10,245.00 per metric tonne.

Nonetheless, silver futures were weakest at the start of the week, with the September 2016 COMEX contract erasing 2.37% to close at $18.86 an ounce.

Some of the most widely-traded soft commodity futures were also nursing hefty losses, with December 2016 CBoT wheat futures down by 2.02% at $4.3575 per bushel and cocoa futures losing 2.81% to $3,012.00 per metric tonne over on the ICE.