Commodities: Oil futures fail to maintain Asian bounce

Oil futures headed lower on Monday, after failing to sustain a jump to $33 per barrel in Asian trading.

In the absence of any notable economic data, Brent fell back down by 3.70% or $1.19 to $30.99 per barrel, while WTI fell 4.47% or $1.44 to $30.75 per barrel at 1728 GMT, over yet another volatile session following Friday's gains stateside and an early uptick over start to this week’s market proceedings in Singapore.

Simon Smith, chief economist at FXPro, said, “Many are rushing to adjust upwards their forecasts for the price of oil especially since the commodity bear market has been ongoing for a year and a half now, in some cases longer if you consider some of the softs.”

“Despite this strong bounce we are still down around 15% on the year for crude prices so it’s too early to say the worst is over for the commodity complex.”

Meanwhile, analysts at HSBC cut their forecasts for the average annual price of Brent in 2016 to $45 (from $60), to $60 (from $70) for 2017 and to $75 ($from $80) for 2018.

Elsewhere, headline base metal futures headed lower on the London Metal Exchange. At 1635 GMT, three-month delivery contracts of copper (down 1.1%), lead (down 1.4%), nickel (down 1.7%), tin (down 0.8%) and zinc (down 0.7%) were firmly in negative territory.

Meanwhile, precious metals climbed back above last Wednesday’s highs on renewed safe haven demand. On the COMEX, the front-month gold futures contract posted an uptick of 1.07% or $11.70 to $1,108.00 an ounce, while spot gold was 0.82% or $8.97 higher at $1,106.92 an ounce.

COMEX silver rose 1.37% or 19 cents to $14.25 an ounce, while spot platinum rose 3.47% or $28.90 to $861.40 an ounce.

Liz Grant, senior account executive at Sucden Financial, said, “Following the rollercoaster ride on the markets last week, the beginning of the new week was somewhat subdued. LME trading was very quiet with prices trading close to unchanged for much of the day and in thin conditions.

“Gold continued to benefit from investor "safe haven" demand, moving back above $1,100 to $1,108 with resistance area above at 1110/15.”

Finally, agricultural commodity futures were largely in negative territory. CBOT corn (down 0.14%), ICE cocoa (down 2.01%), cotton (down 1.25%) and CME live cattle (down 0.28%) headed lower in early trading calls stateside.