Commodities: Oil, gold stay on a tricky patch in Europe, metals recover

Oil benchmarks continued to fall for much of the European trading session on Tuesday, extending losses incurred in Asia earlier in the day on oversupply concerns.

At 1600 BST, the Brent front month futures contract for September delivery was down 0.67% or 36 cents extending overnight losses to $53.11 a barrel. Concurrently, the WTI was marginally up 0.72% to 34 cents at $47.73, having been in negative territory for much of the day.

In light of seasonal demand weakness and renewed dollar strength, analysts at BofA Merrill Lynch lowered their third quarter end forecast to $45 barrel for WTI and $50 for Brent.

“The glut in the coming quarters will still continue, averaging 1 million barrels per day (bpd) over the next 18 months. OPEC is largely to blame for this imbalance, with Saudi Arabia, Iraq, the UAE and now Iran raising crude output into a falling price environment. Non-OPEC output also defied expectations of sharper declines,” the analysts added.

Elsewhere, the precious metals market remained on a sticky patch, with COMEX gold for December delivery down $1.50 or 0.14% at $1,095.40 an ounce and spot gold broadly flat at $1,095.05.

Spot platinum continued to suffer on oversupply concerns losing $1.90 or 0.19% to $980.60 an ounce and no immediate sign on the horizon of a return to June level. Concurrently, spot silver was up 0.27% or 4 cents at $14.65 an ounce.

Meanwhile, most industrial metals bounced back in European trading recovering losses sustained during the previous session in wake of the Chinese equities selloff on Monday.

Past the midway point in training on the London Metal Exchange, three-month contracts of primary aluminium (up 0.5%), copper (up 1.1%), lead (up 1.2%), nickel (up 2.0%), tin (up 5.2%) and zinc (up 1.4%) were seen recouping previous losses.

Finally, in the agricultural commodities market, CBOT corn (up 0.33%), wheat (up 1.14%), ICE cocoa (up 0.09%) and CME live cattle (0.82%) were all trading higher.