Commodities: Russia doesn´t see need for oil output cap

Comments from a top Russian oil official cut short a rally in crude oil futures, dragging a key gauge for the commodities sector lower.

With the price of crude at $50 per barrel Russia saw no need for talks with other major oil exporters in order to cap their production, the country´s oil minister Alexander Novak said, according to reports.

That sent front month West Texas Intermediate lower by 3.0% to $43.40 per barrel on the ICE, alongside a 2.81% slide in Brent futures for delivery in November to $45.61.

Novak´s remarks stood in contrast to recent ones from Saudi energy minister Khalid Al-Falih. On 31 August, the Middle Eastern Kingdom´s top oil official told Al-Arabiya the Kingdom would not flood the market with its oil.

A weaker-than-expected reading on the state of US manufacturing pushed energy futures even lower and weighed on the prices of many metals, despite the weakness evident in the greenback.

Barclays´s gauge of global manufacturing conditions weakened from a reading of -0.24 points in July to -0.57 in August, on the back of a weak print for the ISM´s US purchasing managers´ index on Thursday and mixed PMI´s out of China earlier during the same session.

"Looking ahead, we believe global manufacturing confidence is likely to remain under pressure, as European forward-looking indicators point to further deterioration, US manufacturing activity should fail to improve significantly over the rest of this year, and mixed Chinese August PMIs suggest some near-term - but likely unsustainable - improvement," Barclays´s Apolline Menut said in a research rpeort sent to clients.

As of 1820 BST Bloomberg´s commodity index was trading lower by 0.82% to 82.1 as the US dollar spot index slipped 0.38% to 95.7.

RBOB gasoline futures on NYMEX took the biggest hit in the energy patch, with the October 2016 contract losing 4.37% to $1.2751 per gallon.

As might be expected, precious metals paced gains, with the December COMEX silver contract jumping 1.27% to $18.95/oz..

Copper futures were flat at $2.0775 a pound on COMEX.

Soft commodities on the other hand were trading mostly higher on the Chicago Board of Trade, with December CBoT corn futures up 2.06% to $3.22/oz., and ICE cotton #2 3.28% higher at $6.773 per pound.

Live cattle futures were down 2.79% to $1.0360 per pound.

Robusta coffee futures closed the session 1.3% higher at $1,817 per tonne on Euronext LIFFE.