Commodities: Oil, metal futures falter on weak Chinese data

Oil futures slipped back into the red on Monday, as European traders extended early losses in Asia on oversupply conditions coupled with weak Chinese data.

The Caixin China manufacturing purchasing managers’ index rose to 48.3 in October from 47.2 in the previous month, edging higher of analysts’ expectations for a 47.5 reading, although it remained in contractionary territory, below 50.

China’s official manufacturing PMI, which was released on Sunday, missed expectations at 49.8, unchanged from the previous month and also below the 50 threshold that separates contraction from expansion.

At 1426 GMT, the Brent front-month futures contract for December delivery was down 0.93% or 46 cents at $49.10 per barrel. The WTI was down 1.14% or 53 cents at $46.06 per barrel, with both shedding Friday’s gains.

Analysts at Barclays said the US oil supply story had broadly remained the same. “The story of divergent onshore and offshore production trends continued in August, as Gulf of Mexico production grew by 63,000 barrels per day while other, mostly onshore production declined by roughly 110,000 bpd.”

“Overall, output is down 45,000 bpd from July levels. Demand growth in August slowed to 410,000 bpd year-on-year, from nearly 700,000 bpd in the prior month.”

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

The move continues to dent confidence in the precious metals market. COMEX gold futures contract was down 0.58% or $6.00 at $1,134.80 an ounce, while spot gold was 0.67% or $7.63 lower at $1,134.48 an ounce.

COMEX silver fell 0.37% or 20 cents to $15.37 an ounce, while spot platinum was 1.37% or $13.49 lower at $971.64 an ounce. Base metals futures continued lower in late afternoon European trading.

Past the midway point of the session, primary aluminium (up 0.3%) was the only London Metal Exchange three-month delivery contract in positive territory. Nickel (down 0.7%), copper (down 0.2%), lead (down 0.2%), tin (down 1.2%), and zinc (down 0.8%) futures were all trading lower.

Finally, headline agricultural commodities futures were broadly in negative territory. CBOT corn (down 0.65%), wheat (down 1.20%), ICE cotton (down 0.90%) and CME Live Cattle (down 0.75%) futures were all trading lower stateside. Only, ICE cocoa (up 0.21%) contract was trading up.