Commodities: Oil, base metals at year highs as cocoa futures spike
Oil futures added to overnight gains while base metals touched year highs in early Asian trading on Wednesday.
Brent Crude
$77.62
06:24 04/10/24
Gold
$2,647.65
03:21 04/10/24
Gold Spot
n/a
n/a
Silver
$31.50
03:22 04/10/24
An upward revision to its official selling prices (OSPs) for oil exports by Saudi Arabia, in tandem with shutdowns in eastern Libya, sent both oil futures benchmarks higher. At 07:58 BST, the Brent front month futures contract was trading up 93 cents or 1.38% at $68.45 per barrel while the WTI was up 112 cents or 1.85% at $61.52.
A pullback in the US dollar was seen aiding the oil markets alongside a basket of commodities with base metals being among the beneficiaries as zinc, copper and nickel prices touched record highs for the current fiscal year.
Zinc hit its highest price in eight months overnight as copper capped its highest level since mid-December, while nickel rose to a six-week high. Over on the London Metals Exchange, the zinc three-month contract closed at $2392 per tonne on Tuesday, up $49.00 or 2.1%, while the copper three-month contract closed at $6435 per tonne up $26.00 or 0.4% continuing steadily along its recent bullish path.
Gains in the copper market were further supported by Glencore reporting weaker production. The mining and trading major posted a 9% drop in its first-quarter copper output on Tuesday. Finally, nickel was up 3.3% or $457.50 at $14307.50 per tonne.
On the precious metals front, gold continued to recover from its decline to a six-week low on 1 May to $1,170 an ounce. In early trading on Wednesday, COMEX Gold for June delivery was trading at $1,195.60 an ounce up $2.40 or 0.20%, while spot gold was trading up $2.80 or 0.23% at $1,196.14. Additionally, COMEX silver was broadly flat at $16.56 down a cent.
Jasper Lawler, market analyst at CMC Markets UK, said: “There appears to have been a short squeeze in gold with prices having made a false break beneath the April low on Friday before ripping back towards $1200 an ounce.”
On the soft commodities front, CBOT corn and wheat contracts were in the green while ICE cotton was in the red. Of note is the ICE cocoa contract trading up 2.37% or $68.00 at $2,943 per tonne on supply concerns.
According to analysts at Sucden, concerns over Ghana’s cocoa harvest, considered the world’s second largest by volume, is driving market sentiment after a government report claimed volumes could decline to 700,000 tonnes versus a previous estimate of 850,000 tonnes.