Commodities: Oil pummelled by US inventory data, increasing Iraqi exports

Oil futures took a hammering on Thursday on rising US stockpiles and evidence of increasing Iraqi oil exports.

At 1640 GMT, the Brent front-month futures contract was down 2.03% or 93 cents to $44.88 per barrel. Concurrently, WTI was 2.12% or 91 cents lower at $42.02 per barrel, as 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.

Meanwhile, base metals took another tumble in European trading on persistent concerns about China’s importation levels, as copper hit another six-year low. In late afternoon trading on the London Metal Exchange, the three-month copper delivery futures contract was down 2.0% to $4,838.00 per metric tonne.

Additionally, primary aluminium (down 0.8%), nickel (down 0.3%), tin (down 1.3%) and lead (down 0.1%) futures were also in negative territory.

Precious metals also continued lower, with the COMEX gold futures contract down 0.57% or $6.20 at $1,078.70 an ounce, while spot gold was 0.62% or $6.72 lower at $1,079.54 an ounce. COMEX silver fell 0.41% or six cents to $14.21 an ounce, while spot platinum was down 0.58% or $5.15 at $876.65 an ounce.

Analysts at Barclays said acceleration in commodity price declines over the third quarter has provided the necessary catalyst for large-scale supply adjustments required eventually to restore a "better balance" to the physical markets.

“Although we see only limited further downside to the prices of oil, copper and gold, the prospects for a rapid recovery to 2014 levels are slim, in our view, and depend mostly on an improvement in the global growth picture, of which there are few signs at present,” they added in a note to clients.

Finally, agricultural commodities futures were on a mixed patch in early trading stateside. CBOT corn (down 0.14%) and ICE cotton (down 0.06%) futures were trading lower, but CBOT wheat (up 0.20%), cocoa (up 0.12%) and CME live cattle (up 1.68%) futures were on the up.