Commodities: Oil futures rise on Brazilian strike action

Oil futures saw an uptick on Tuesday after an ongoing strike in Brazil, the world's ninth-largest crude producer, lent support to the price, while metals trading remained lacklustre in Europe for yet another session.

The strike at Brazil's state-run oil producer Petrobras, which began on Sunday, has slowed the country’s daily oil output of 2.95 million barrels per day by around 25%, according to local media, with some newswires reporting a reduction of as much as 400,000 to 500,000 bpd, as yet to be verified by the government.

At 1715 GMT, the Brent front-month futures contract for December delivery was up 2.23% or $1.09 at $49.88 per barrel. The WTI also rose, by 2.58% or $1.19, to $47.33 per barrel with both benchmarks reversing Monday’s losses.

Nonetheless, oversupply would remain a theme for some time yet, said Myrto Sokou, senior analyst at Sucden Financial, as Russian oil production climbed 0.4% month-on-month to reach 10.78m bpd according to latest data.

“Following the recent strong increase, Russia became the world’s largest producer of crude oil. In addition, US oil inventories data continues to rise during the last three consecutive weeks, verifying supply glut concerns in the market. In the meantime, we continue to receive fairly mixed signs regarding Saudi Arabia’s economic conditions.”

Gold futures continued in negative territory for yet another session, in wake of the US Federal Reserve maintaining interest rates at 0.25% last week, but leaving the door open to an increase in December.

The move continues to cloud precious metals trading. COMEX gold futures contract was down 1.58% or $18.00 at $1,117.90 an ounce, while spot gold was 1.33% or $15.09 lower at $1,118.75 an ounce.

COMEX silver fell 1.12% or 17 cents to $15.24 an ounce, while spot platinum was 1.59% or $15.52 lower at $961.63 an ounce. Base metals futures continued lower or were broadly flat in European trading on the London Metal Exchange.

Trading in three-month delivery contracts of primary aluminium (flat), nickel (down 0.7%), copper (down 0.1%), lead (flat), tin (down 1.0%), and zinc (down 1.2%) remained dreary.

Finally, headline agricultural commodity futures saw mixed trading during the morning session stateside. CBOT corn (up 0.53%) and wheat (up 0.94%) futures were in positive territory, but ICE cotton (down 0.81%), cocoa (down 0.06%) and CME Live Cattle (down 0.74%) futures were all trading lower.