Commodities markets summary

Reported by AAP
Wednesday, October 7, 2015
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Edt Retail Trust,L&M Energy Limited
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A summary of trading in key commodities markets overseas:


Global oil prices have extended gains, hitting one-month highs on hopes for an easing of the global oversupply of crude.

US benchmark West Texas Intermediate for delivery in November jumped $US2.27 to $US48.53 a barrel on the New York Mercantile Exchange on Tuesday, its highest level since late August.

Brent North Sea crude for delivery in November closed at $US51.92 a barrel in London on a gain of $US2.67.

John Kilduff of Again Capital said that the US Department of Energy's latest short-term energy outlook report on Tuesday appeared to spark the rally.

"They see oil production down 120,000 barrels per day in September versus August, so that's a big drop," Kilduff said.

For 2016, the DoE forecast US production would fall to an average of 8.9 million barrels per day, from 9.2 million in 2015.

"It definitely caught the attention of the market," he said.


Gold has risen to its highest in nearly two weeks as the US dollar fell in the wake of disappointing US economic data that raised doubts over a Federal Reserve interest rate rise this year, while platinum rallied three per cent.

Spot gold rose 1.4 per cent to $US1,151.20 an ounce, the highest since September 24, and was up 1.0 per cent at $US1,147.01 an ounce by 2.44pm EDT (0544 Wednesday AEDT). US gold futures for December delivery settled up 0.8 per cent at $US1,146.40 an ounce.

Data last week showed that US employers had slammed the brakes on hiring over the last two months. On Monday, data showed that the pace of growth in the US services sector decelerated in September, though some analysts said a December US rate rise could not be ruled out entirely.

"The Fed is worried about the implications of continuing low inflation or even outright deflation because of low oil prices, but a December rate hike is still possible," Mitsubishi Corp strategist Jonathan Butler said.

Analysts also cited increasing international political tensions after Russia's warplanes violated the air space of alliance member Turkey at the weekend.

"Increasing tensions between Russia and Turkey are helping gold today ... That should continue in the short term, but then the focus will be shifting back to what the Fed is going to do and the dollar," Commerzbank analyst Daniel Briesemann said.

The US dollar was down 0.7 per cent against a basket of currencies and global shares rose.

Platinum rose 3.1 per cent to $US940.25 an ounce, having hit a near seven-year low of $US888 on Friday, offering industrial buyers a relatively good price, said James Steel, chief metals analyst for HSBC Securities in New York.

Silver rose to the highest in more than three months at $US16.08 an ounce.

Palladium reached its highest since June at $US712.50 an ounce.


Copper prices are steady, supported by falling inventories and output cuts, but persistent concerns about demand growth in top consumer China kept a lid on the market.

Benchmark copper on the London Metal Exchange closed up 0.1 per cent at $US5,185 a tonne.

Prices were supported by a drawdown in inventories, as stocks of copper in LME-approved warehouses fell to 312,225, down more than 15 per cent from a peak in late August.

Bonded stocks in Chinese warehouses are estimated to have fallen about 350,000 tonnes over the past three months.

"The market is starting to look at the fact that warrant (inventory) levels are falling quite rapidly and you have more production reduction announcements," said David Wilson, analyst at Citi.

"Is this a market you really want to be shorting?"

Lead rose 0.2 per cent to $US1,628.5 a tonne, after touching a five-year low of $US1,608 earlier in the day. Zinc slid 0.7 per cent to $US1,655; tin gained 1.0 per cent to $US15,750; nickel rose 0.1 per cent to $US9,960; while three-month aluminium closed down 0.7 per cent at $US1,554.

07/10/2015 15:12Sydney, Australia. 7 October,2015