Commodities: Oil slides towards six-year low ahead of OPEC meeting
Updated : 16:39
Oil benchmarks slipped towards six-year lows on Wednesday, ahead of the OPEC meeting later this week, while metals saw lacklustre trading following two days of upticks.
At 1540 GMT, the Brent front-month futures contract was down 1.62% or 72 cents to $43.72 per barrel while WTI was down 1.96% or 82 cents to $41.03 per barrel, as a relatively stronger dollar and oil oversupply concerns ahead of the meeting of OPEC ministers on 4 December piled further pressure on both benchmark.
Kash Kamal, Senior Analyst at Sucden Financial, said, “The majority of analysts predict that OPEC will maintain output while a stronger dollar will only serve to exert further downward pressure to crude prices.
“Accordingly, we could see Brent futures experience additional selling pressure, possibly revisiting the lows seen in August where it traded towards $42.20/bbl as the fundamental outlook shows little sign of improving in the near term.”
Elsewhere, base metals saw flat to negative trading on the London Metal Exchange. The three-month copper delivery futures contract registered a 0.6% slump to $4,581.50 per metric tonne, staying within range of six-year lows, as Chinese producers opted over the weekend to introduce production cuts for 200,000 metric tonnes.
Last week, Chile, the world’s largest producer of copper announced its intention to focus on cost cuts rather than production cuts for the moment. Additionally, lead (down 0.3%), tin (up 0.7%), zinc (down 1.5%) and primary aluminium (up 1.1%) futures painted a mixed picture.
Strengthening of the dollar also triggered declines in the precious metals market. COMEX gold futures fell 0.84% or $8.90 to $1,054.60 an ounce, while spot gold was 1.24% or $13.29 lower at $1,056.00 an ounce. COMEX silver fell 0.31% or four cents to $14.04 an ounce, while spot platinum fell 0.55% or $4.65 to $834.20 an ounce.
Finally, headline agricultural commodity futures were largely in negative territory. CBOT corn (down 0.54%), wheat (down 0.53%), ICE cocoa (down 0.45%) and CME live cattle (down 0.97%) futures traded lower. However, ICE cotton (up 0.35%) bucked the trend notching modest gains.