Commodities: WTI dips below $32 for first time in 12 years

At 1715 GMT, the US futures benchmark was down 4.58% or $1.52 at $31.64 per barrel, heading towards another record intra-session decline in wake of the supply glut and continuing worries over lacklustre demand. Concurrently, Brent was also down a record 5.31% or $1.78 at $31.77 per barrel.

Earlier in the European session, analysts at Societe Generale lowered their price forecast for the Brent front-month contract from $53.75 per barrel to $42.50. More specifically, and for each of the four quarters of 2016, the French investment bank's analysts forecast Brent futures to trade around $35, $40, $45 and $50, from first to fourth quarter.

Base metal futures also fell across the London Metal Exchange board following further declines in Asia, with China’s headline producer prices staying unchanged for December at -5.9%, according to the country’s National Bureau of Statistics.

Unsurprisingly, three-month delivery contracts of copper (down 2.3%), nickel (down 1.3%), lead (down 2.6%), zinc (down 2.4%) and tin (down 0.7%) extended the previous session’s losses in late afternoon trading, while primary aluminium futures escaped a drop by posting a nominal uptick of 0.3%.

Meanwhile, gold’s stay above the $1,100 an ounce level proved to be short-lived, as COMEX futures contract for February delivery fell 0.04% or 40 cents to $1,097.50 an ounce, while spot gold was 0.48% or $5.30 lower at $1,098.85 an ounce.

Spot platinum was also down 3.53% or $31.00 at $848.05 an ounce, but COMEX silver reversed earlier declines rising to $13.98 an ounce, up 0.41% or six cents.

Liz Grant, senior account executive at Sucden Financial, said, overnight trading saw further falls in Chinese equities, the fallout from which put further pressure on industrial commodities.

“On the LME, copper traded down through the lows seen in late November 15 to the $4,380 area before recovering slightly during the course of the London morning. LME trading in general remained quiet and apart from copper, turnover in the other contracts was low to moderate.”

Finally, agricultural commodity futures were firmly in negative territory in early trading calls stateside. CBOT corn (down 1.75%), cotton (down 2.04%), ICE cocoa (down 4.24%), and CME live cattle (down 0.23%) futures all headed lower, but the ICE cotton contract (up 1.06%) bucked wider trends and posted gains.