Commodities: Oil hits fresh lows on IEA data but metals recover

Oil futures took another hammering on Friday, as the International Energy Agency warned that global crude stockpiles were currently at a record high of 3bn barrels.

At 1642 GMT, the Brent front-month futures contract was down 0.82% or 36 cents to $43.70 per barrel. Meanwhile, WTI was 2.80% or 91 cents lower at $40.58 per barrel, as the IEA opined the oil glut looks set to continue into well into the next year.

"The massive [supply] cushion has inflated even as the global oil market adjusts to $50 per barrel. Demand growth has risen to a five-year high of nearly two million barrels per day," the agency said. "Gains in demand have been outpaced by vigorous production from OPEC and resilient non-OPEC supply."

Overnight, the US Energy Information Administration (EIA) noted a rise of 4.2m barrels in domestic crude inventories to 487m for last week, compared with analysts' expectations for an increase of 1 to 1.5m barrels.

Furthermore, crude stocks at the US delivery hub of Cushing, Oklahoma rose by 2.237m barrels, the biggest weekly increase since March, with growing evidence of additional Iraqi barrels coming to an already oversupplied market.

EIA estimates, based on global shipping data, suggest US imports of Iraqi oil would be in the region of 19m barrels for November; the highest on record since January 2012. Separately, oil exporters' cartel OPEC said the current crude supply glut was the highest since the global financial crisis.

Elsewhere, the decline in base metal futures was reversed in European trading. On the London Metal Exchange, the three-month copper delivery futures contract, dragged down to historic lows in recent sessions, was broadly flat at $4,838.00 per metric tonne.

Additionally, primary aluminium (up 1.0%), nickel (up 0.1%) and tin (up 0.1%) futures were on the up, while zinc and lead contracts were broadly flat.

Liz Grant, senior account executive at Sucden Financial, said, “Commodities prices remained under pressure as did the global equity markets. We noted that LME copper traded briefly below $4,800 but the other metals mostly held above the lows established earlier in the week. Light end of week short covering saw most metals LME contracts turn positive on the day but only just.”

Precious metals largely stayed in negative territory, but COMEX gold futures contract saw marginal gains of 0.6% or 60 cents to $1,081.60 an ounce. Elsewhere, spot gold was 0.30% or $3.24 lower at $1,081.86 an ounce. Away from gold, COMEX silver fell 0.11% or a cent to $14.21 an ounce, while spot platinum was down 1.37% or $12.05 at $865.80 an ounce.

Finally, headline agricultural commodities futures were on a negative patch in early trading stateside. CBOT corn (down 0.62%), wheat (down 0.70%), ICE cotton (down 0.15%) and CME live cattle (down 2.16%) futures were in decline.