Commodities: Oil benchmarks head lower, gold up after US Fed decision

At 1239 BST, the Brent front month futures contract was down 0.41% or 20 cents to $48.88 per barrel, with WTI futures, down 1.30% or 61 cents to $46.29 per barrel, reversing some of the previous session’s gains.

Most base metal futures were in negative territory on the London Metal Exchange at midday as the weekend approached. COMEX copper also headed lower over concerns about China, trading down 0.73% or $1.80 at $243.40 per pound.

China’s economic transition from a manufacturing economy to a modern services sector focussed nation will invariably lead to lower gross domestic product growth, according to International Energy Forum 's Secretary General Aldo Flores-Quiroga.

Speaking at the Gulf Intelligence Energy Markets Forum in Fujairah, UAE, Flores-Quiroga said, “The current picture we have of Chinese economic performance – i.e. one of correction – is not far from what’s happening.

“While it is not preordained that a transition results in lower economic performance, we see China’s growth dipping to around 5% per annum over the medium term and that is still a decent rate which many countries would wish for.”

Meanwhile, a senior Kuwaiti official told the same forum that OPEC does not expect China's oil demand to slump along the trajectory of past declines seen in OECD countries, according to a senior Kuwaiti official.

Nawal Al Fezai, OPEC Governor for Kuwait, said the producers' group sees stable sustainable economic growth in China, even if it does not match the 7% per annum rate Beijing is hoping for.

Despite expectations of lower oil importation by China, the country has continued to import on average seven million barrels per day in every month of 2015 for which data has been published, except the month of May.

Al Fezai admitted OPEC depends on China to a great extent as one of its leading importing clients. “But, I think fears about a slump in Chinese demand are exaggerated, and I don’t see it falling to the extent that it did in Europe in wake of the financial crisis,” she added.

Al Fezai declined comment on whether OPEC would call an extraordinary meeting before its scheduled summit in December. “All I can say is that in volatile times such as these, OPEC would be patient.”

However, the big winners in Friday's commodities session were the gold markets, as futures and spot trading in Europe and Asia saw the yellow metal post gains after the US Federal Reserve decided against raising interest rates in September.

Following the conclusion of its two-day policy meeting on Thursday, the US central bank also lowered its estimate of the economy's potential rate of growth and noted it was monitoring "developments abroad".

As the dollar declined against global currency crosses, COMEX gold for December delivery was up 1.66% or $18.50 to $1,135.50 an ounce, while spot gold was up 0.25% or $2.85 at $1,134.36 an ounce. Concurrently, COMEX silver was up 1.68% or 25 cents to $15.24 an ounce, but spot platinum fell 0.88% or $8.64 to $975.81 an ounce.

Finally, agricultural commodities futures conveyed a mixed picture. CBOT corn (up 0.21%) and wheat (up 0.73%) contracts gained some of the ground lost overnight. ICE cocoa (up 0.98%) futures also rose, but ICE cotton (down 0.08%) and CME live cattle (down 0.11%) futures slipped marginally lower.