Commodities: Oil recoups losses, metals hammered in Europe

A relatively stronger dollar combined with oversupply concerns to further pressurise oil futures in Asian trading, but trading in Europe saw global benchmarks stacks up decent gains. At 1635 GMT, the Brent front-month futures contract was up 1.68% or 75 cents to $45.41 per barrel, while WTI was up 0.74% or 31 cents at $42.21 per barrel.

Comments by Saudi Oil Minister Ali Al-Naimi that the country – considered the world's largest exporter of crude oil – would cooperate with all oil producing countries to help “stabilise the oil market” also lent support to oil prices.

Analysts at Capital Economics, Barclays, Fitch Ratings and Moody’s, while having revised their respective average oil price predictions for 2016 downwards, have also suggested that a bottoming out of the market might be in sight.

Meanwhile, Fitch Ratings said changes in global oil supply trends, including high Russian production, the expected renewal of Iranian heavy crude exports and the pressure on US shale oil output, may benefit European refiners.

Elsewhere, base metals were hammered on the London Metal Exchange. The three-month copper delivery futures contract registered a massive 2.9% slump to $4,478.00 per metric tonne, extending a succession of losses beyond six-year lows, as Chile, the world’s largest producer of copper announced its intention to focus on "cost cuts" rather than production cuts.

Kevin Norrish, commodities analyst at Barclays, said, “With large copper surpluses looming prices may need to continue falling to encourage the supply cuts the market needs in order to rebalance over the medium term.

“In oil, the likelihood of another large move lower will be heavily influenced by northern hemisphere temperatures as oil in storage continues to register new all-time highs.”

Additionally, lead (down 1.7%), tin (down 1.5%), zinc (down 2.8%), primary aluminium (down 1.1%) and nickel (down 6.2%) futures sustained heavy losses as well.

Precious metals also registered declines with a US interest rate hike for December being priced in by traders. COMEX gold futures fell 0.80% or $8.60 to $1,067.70 an ounce, while spot gold was 0.81% or $8.72 lower at $1,069.29 an ounce. COMEX silver fell 0.36% or five cents to $14.08 an ounce, while spot platinum fell 0.64% or $5.47 to $848.98 an ounce.

Finally, headline agricultural commodity futures were on a mixed patch ahead of the US Thanksgiving Holiday. CBOT corn (up 0.34%), wheat (up 1.43%) and CME live cattle (up 0.78%) futures were up, but ICE cotton (down 1.58%) and cocoa (down 1.84%) futures traded lower.