Commodities: Oil plunges on OPEC stalemate, metals continue to struggle

Oil benchmarks headed lower on Monday, after OPEC rolled over its crude production level, which was last set at 30m barrels per day, but declined to offer an exact figure at the conclusion of its oil ministers' summit in Vienna, Austria late last week.

Secretary General Abdalla Salem El-Badri said, "OPEC will wait and see how the market develops over the next six months, and saw no need to alter the current production level during a period of market adjustment."

In wake of the OPEC announcement, both Brent and WTI closed over 3% lower on Friday. The short-term bearishness extended to Monday’s session with Brent down another 4.37% to $41.12 per barrel, and WTI down 4.95% to $37.99 per barrel at 1650 GMT.

With both benchmarks at lurking near six-year lows, industry surveys suggest OPEC's production for November was at 32.1m bpd, well in excess of the cartel’s stated levels.

Away from the oil market, most metal futures registered late afternoon declines during trading in Europe. At 1635 GMT, three-month delivery contracts of primary aluminium (down 0.8%), nickel (down 1.8%), tin (down 0.5%) and zinc (down 0.65) on the London Metal Exchange.

The copper contract, still at historic lows, remained under pressure down 1.0% to $4,569.00 per metric tonne, while lead provided the only modicum of resistance over the session trading up 0.4% to $1685.75 per metric tonne.

Liz Grant, senior account executive at Sucden Financial, said, “LME trading at the start of the new week was routine, quiet and turnover was low. Copper was again trading either side of $4,600 and the rest of the market was not far from unchanged for most of the day.

“In the case zinc, Nyrstar, announced a production cutback at its US operations amounting to 50,000 metric tonne in concentrate and 9,000 metric tonne of refined metal but this did little to impact the price and it remained pegged below $1,600. Lead, which saw reasonable short covering on Friday, flirted with $1,700 area during the London morning but sellers held the rally in check.”

Precious metals complex also saw declines across the board with many traders pricing in a US interest rate hike. COMEX gold futures contract was down 0.77% or $8.40 to $1,075.70 an ounce, while spot gold was 0.89% or $9.70 lower at $1,076.74 an ounce. COMEX silver was down 1.23% or a cent to $14.35 an ounce, while spot platinum was down 1.19% or $10.47 to $868.98 an ounce.

Finally, agricultural commodity futures were on a mixed patch in early trading stateside. CBOT corn (down 1.83%), ICE cotton (down 0.85%) and CME live cattle (down 2.91%) were trading lower. However, CBOT wheat (up 0.52%) and ICE cocoa (up 0.59%) futures were trading higher.