Commodities: Oil and gold up in another volatile European session

Oil and gold futures were up in European trading on Thursday, while selected base metals contracts headed lower in another volatile day for the commodities markets.

At 1607 BST, the Brent front month futures contract was up 1.11% or 53 cents to $48.11 per barrel, having registered losses for much of the Asian session. WTI futures, up 2.31% or $1.02 to $45.17, narrated a similar tale of fluctuation as the market struggles to find direction.

Investment bank Macquarie became the latest forecast to lower its projections for Brent and WTI. “Our 2015 Brent target remains $56, 2016 is $58 (down 14% from $68) and 2017 is US$67 (down 17% from $81) and our long-term estimate is now US$80 (down 5% from US$84). We expect WTI to average $53, down from $62,” the bank said in a note to clients.

Macquarie expects the crude oil markets to “remain dominated by oversupply”, but expects the oversupply to last longer. “Moreover, even when the physical markets begin rebalancing in late 2016, the massive overhang of crude oil in storage will act to reduce volatility and act as an effective spare capacity in a market producing at near full rates,” the investment bank’s analysis team noted.

Meanwhile, precious metals registered minor upticks led higher by gold, with platinum staying on a lacklustre patch. COMEX gold for December delivery was up 0.80% or $8.80 at $1,110.80 an ounce, while spot gold was up 0.33% or $3.70 at $1,111.55 an ounce. Elsewhere, COMEX silver was up 0.47% or seven cents to $14.65 an ounce, while spot platinum was up 0.14% or $1.38 to $982.68 an ounce.

Elsewhere, base metal futures sent mixed signals on the London Metal Exchange, with some contracts failing to extend marginal gains achieved over the previous European session on fresh concerns about the global economy.

Past the midway point of trading on the LME, three-month delivery contracts of copper (up 0.5%), lead (up 0.3%), nickel (up 2.6%) and tin (up 1.6%) were all in positive territory. However, primary aluminium (down 1.4%) and zinc (down 0.1%) were in negative territory.

Finally, major agricultural commodities futures were in positive territory, albeit marginally. CBOT corn (up 0.68%), wheat (up 1.06%), ICE cocoa (up 0.37%), cotton (up 0.52%) and CME live cattle (up 0.10%) futures were all in positive territory.