Commodities: Oil trades sideways for third successive session

Oil benchmarks stayed within range of recent levels on Friday, hounded by oversupply concerns, while base metals recovered on short covering as the weekend approached.

At 1655 GMT, the Brent front-month futures contract was up a mere 0.18% or eight cents to $44.26 per barrel, having risen as high as $44.50 in early trading before shedding the gains. Meanwhile, WTI was 1.28% or 52 cents lower at $40.02 per barrel, with both major contracts fluctuating within the $2 range, and declines being more pronounced in the case of the WTI.

Analysts at Bank of America Merrill Lynch said downward pressure on oil prices could force Saudi Arabia to de-peg its currency from the dollar and in turn weigh further on emerging market growth next year.

Meanwhile, base metals recovered from recent lows in late afternoon European trading on short covering calls. The three-month copper delivery futures contract, trading at six-year lows, rose 1.2% to $4,653.00 per metric tonne on the London Metal Exchange.

Additionally, primary aluminium (up 1.8%), nickel (up 0.1%), tin (up 1.5%), zinc (up 3.9%) and lead (up 2.4%) futures also posted upticks.

However, precious metals fell into negative territory with COMEX gold futures contract down 0.04% or 40 cents to $1,077.50 an ounce, while spot gold was 0.30% or $3.27 lower at $1,078.84 an ounce. Away from gold, COMEX silver was down 0.89% or 13 cents to $14.10 an ounce, but spot platinum was broadly flat at $857.50 an ounce.

Analyst at Macquarie said, “At current prices we estimate the metal that will be most heavily bought in the January rebalancing will be nickel and copper, the most heavily sold would be gold. Though on present prices, the shifts are quite small.

Finally, headline agricultural commodity futures were up in early trading stateside. CBOT corn (up 0.34%), wheat (up 0.56%), ICE cotton (up 0.36%) and CME live cattle (up 0.68%) futures were all trading higher.