Commodities: Oil rises, metals market mixed as gold continues to fall

Oil benchmarks saw a marginal uptick on Thursday, with the market appearing to have suitably digested implications of the Iranian nuclear settlement earlier in the week.

While most in the industry reckon a flood of Iranian oil would not materialise over the short-term, analysts at Bank of America Merrill Lynch said the projected return of up to 0.7m barrels of the country’s over the next 12 months, would add downside pressure on forward oil prices of $5-$10 per barrel.

At 1425 BST, the Brent front month futures contract was up 1.38% or 79 cents at $57.84 a barrel, while WTI was up 0.95% or 49 cents at $51.90.

Meanwhile, the base metals market continued to send mixed signals. Past the midway point in trading on the London Metal Exchange, three-month futures contracts of primary aluminium (down 0.5%), copper (down 1.3%), lead (down 1.7%) and nickel (down 2.7%) were all trading lower.

Going the other way, tin (up 0.8%) and zinc (up 0.4%) showed some signs of a recovery. However, analysts at Societe Generale said tin futures would have to contend with oversupply pressures for the remainder of the year.

Global refined tin production will climb 3.3% this year, but rise in consumption would only be around 2.5% on an annualised basis indicative of a supply-demand disconnect, the analysts added.

Precious metals market continued to falter with COMEX gold for August delivery was down 0.44% or $5 at $1,142.40 an ounce, while spot gold was down by a similar margin to $1,144.43 an ounce. COMEX silver for September delivery was down 17 cents or 1.12% at $14.88 an ounce with spot platinum was down 1.16% or $11.85 at $1,009.98 an ounce.

In the agricultural commodities sphere, CBOT corn futures contract rose 1.63% or $7 to $436.50 a bushel, continuing a strong performance overnight with perceptions of lower than expected stockpiles driving premiums and presumably providing incentive to buyers.

Elsewhere, CBOT wheat futures contract was up 0.71% or $4 at $570.75 a bushel. However, ICE cocoa (down 0.15%), cotton (down 0.17%) and CME live cattle (down 0.05%) contracts were firmly in the red.