Commodities: Oil futures seesaw either side of $30/bbl mark

Oil futures continued to lurk either side of $30 per barrel mark on Tuesday, initially dipping to $29 following early short calls in Singapore, before recovering over the second half of the European session.

At 1712 GMT, the Brent front-month futures contract was up 4.82% or $1.47 to $31.97 per barrel while the WTI was 4.22% or $1.28 higher at $31.62 per barrel, having been through another rocky session for the oil markets.

The Brent and WTI spread narrowed to less than a dollar in intraday calls, rising by 35 cents in favour of the former as the Iraqi oil minister commented that OPEC members may need to cooperate to reduce output.

Jasper Lawler, analyst at CMC Markets, said, "Oil traders have taken Monday’s drop as an opportunity to cover shorts and buy into a possible interim bottom following the massive two-day surge last week.

"Any concerted action by OPEC and non-OPEC oil producers (for instance Russia) seems unlikely since US shale producers would just use the resulting higher prices as an opportunity to ramp up their own again."

Elsewhere, base metal futures traded higher across the London Metal Exchange board. At 1635 GMT, the much scrutinised three-month copper delivery futures contract rose 1.9% to $4,507.50 per tonne, but remained within range of six-year lows. Concurrently, primary aluminium (up 0.8%), nickel (up 1.2%), zinc (3.1%), lead (1.4%) and tin (up 3.0%) contracts also headed higher.

Meanwhile, precious metals posted upticks on the expectation of a dovish tone from the US Federal Reserve and continued safe haven demand. Front-month COMEX gold futures rose a further 1.18% or $13.00 to $1,118.60 an ounce, while spot gold was 0.91% or $10.07 higher at $1,117.97 an ounce.

Yann Quelenn, market strategist at Swissquote, said, “Gold's short-term upside move continues. The metal has broken hourly resistance at $1,113 (08/01/2016 high) while hourly support is given at $1,046 (03/12/2015 low).

“However, in the long-term, the underlying downtrend continues to favour a bearish bias. A break of the resistance at $1,223 is needed to suggest something more than a temporary rebound.”

Continuing with precious metals, COMEX silver futures rallied 1.62% or 23 cents to $14.49 an ounce, while spot platinum rose 1.86% or $16.00 to $874.80 an ounce.

Finally, headline agricultural commodity futures were largely on positive turf. CBOT corn (up 0.20%), wheat (up 1.19%) and ICE cocoa (up 0.50%) traded higher in early calls stateside, while ICE cotton (down 0.19%) and CME live cattle (down 0.06%) futures were marginally lower.