Commodities: Oil futures plummet as copper heads sideways

Oil slipped lower on Wednesday after preliminary US stockpile data pointed to an inventory uptick, while copper futures headed sideways in a session marked by lower trading volumes as North American markets took a break for the Veterans Day holiday.

At 1640 GMT, the Brent front-month futures contract was down 2.70% or $1.28 to $46.16 per barrel. Meanwhile, WTI was 2.6% or $1.18 lower at $43.03 per barrel, with the American Petroleum Institute noting overnight that US crude stocks jumped by 6.3m barrels in the week to 6 November to 486.1m barrels, compared with analysts' expectations for an increase of 1m barrels.

The Energy Information Administration (EIA) will release official stockpile data on Thursday, a day later on account of Veterans Day. Analysts at Deutsche Bank expect market oversupply to last well into 2016. The bank is currently predicting an oversupply of around 1m barrels per day in the first half of next year.

Sucden Financial mirrored the sentiment. “Crude oil prices came under renewed pressure this morning, as bearish fundamentals, a strong US dollar and persistent concerns over global supply glut weigh on the market,” said senior research analyst Myrto Sokou.

After two sessions in decline, copper saw a mid-week uptick. In late afternoon trading on the London Metal Exchange, the three-month copper delivery futures contract was up 0.5% to $4,938.0 per metric tonne.

Additionally, primary aluminium (up 0.8%), nickel (up 0.3%), zinc (down 0.8%) and tin (up 0.6%) futures also traded higher, but lead (down 1.0%) stayed in negative territory.

Precious metals continued on a negative patch with spot gold down 0.23% or $2.50 at $1,087.17 extending overnight declines. Spot silver fell 0.46% or seven cents to $14.29 an ounce, while spot platinum was 1.85% or $16.67 lower at $883.73 an ounce.

Jasper Lawler, market analyst at CMC Markets, said, “Gold and silver continue to languish at multi-month lows with nothing for the moment changing the belief in the market that the US Federal Reserve is ready to raise rates in December.”