Commodities: Oil stabilises at lower levels in Europe, tin down to record lows

Oil benchmarks stabilised in mid-afternoon European trading, albeit at lower levels, following marked overnight declines stateside and during early Asian trading.

At 15:26 BST, the Brent front month futures contract for August delivery was trading up 1.53% or 95 cents at $62.96 per barrel, while the WTI was down 0.77% or 45 cents at $58.78 per barrel.

Both benchmarks endured extreme volatility over the past 24 hours as the Greek debt crisis escalated in the face of ample oil supplies and tepid macroeconomic data coming out of China, as Beijing moved to cut its interest rates.

“Oil prices have fallen as once again the Chinese central bank has felt the need to cut interest rates and the pace of growth in China comes under scrutiny. Europe stalls and the US hesitates there are precious few economic regions that look set to pick up even more slack in the oversupply to the markets,” said Alastair McCaig, market analyst, IG.

Wider malaise triggered demand concerns resulting in the continuation of price slide on the base metals market. Past the midway point in trading on the London Metal Exchange (LME), the three-month delivery contracts of alloyed aluminium (down 0.6%), copper (down 0.7%), lead (down 1.1%), nickel (down 0.3%) and zinc (down 1.3%) conveyed a very bearish picture.

However, it was nothing compared to the tin contract which shed $435.00, or 3% down, to $13,952.50 per tonne. Persistent oversupply concerns coupled with lacklustre emerging markets and electronics sector demand have driven the contract, started by the LME in June 1989, down by 23% on an annualised basis, making it the worst performing base metal on the market this year.

Away from base metals, precious metals could not hold on to their safe haven tag with COMEX gold down 0.74% or $8.70 to $1,170.30 an ounce while COMEX silver was lower by 20 cents or 1.27% at $15.50 an ounce.

Spot gold was trading lower by $10.79 or 0.91% at $1.169.94 an ounce, while spot platinum down $4.90 or 0.45% and $1,076.35 an ounce.

Finally, on the agricultural commodities market, CBOT corn (up 0.38%) and wheat (up 0.26%) were in the green. However, ICE cocoa (down 0.75%), cotton (down 2.11%) and CME live cattle (down 0.32%) were all trading lower.