Commodity Capsule| Brent crude extended losses; gold rises, copper advances

Commodity Capsule: Oil prices extended losses on Friday, and looked set for a sixth straight week of declines, as voluntary oil output cuts agreed by OPEC+ producers fell short of market expectations.

Brent crude futures for February fell under $81 a barrel. US WTI crude futures are weak and hovering at $76 a barrel.

Brent prices were trading at levels lower than last week's close, but WTI pared some losses to trade slightly higher than last Friday's level.

OPEC+ is focusing on reducing output as prices have fallen from $98 in late September amid concerns over weaker economic growth in 2024 and expectations of a supply surplus.

Saudi Arabia, Russia, and other members of OPEC+ agreed to a voluntary output reduction of 900,000 bpd in addition to extending 1.3 million bpd in production cuts already in place.

Goldman Sachs said its December forecast for Brent was "moderately tilted" to the downside of its previously estimated range, calling the oil producers' move a "temporary response," and "difficult to implement."

According to JP Morgan, Oil prices should stay supported between $80 and $90 a barrel, peaking late in the third quarter of 2024.

Gold prices looked set to mark a third straight weekly rise on Friday after data showing cooling inflation cemented bets for a rate cut in the US

Traders are looking forward to comments from Federal Reserve's Chair Powell later in the day.

Spot gold rose edged to $2,041 per ounce, after marking an over $60 rise in November – its second straight monthly rise.

U.S. gold futures for February delivery rose 0.1 per cent to $2,059.30.

Data on Thursday showed U.S. consumer spending rose moderately in October, while the annual increase in inflation was the smallest in more than 2-1/2 years.

The dollar index fell by 0.2 per cent, after clocking its weakest monthly performance in a year in November, despite a 0.6 per cent jump overnight.

Yields on 10-year Treasury notes also ticked lower.

More Americans applied for unemployment benefits last week and the number on jobless rolls surged to a two-year high in mid-November

J.P. Morgan said that steady demand growth will lift the prices of key commodities in 2024 from current levels but advised that investments should be tactically timed.

Gold could rally around the middle of next year and hit a peak of $2,300 an ounce in 2025, with silver crossing above $30 per ounce, J.P. Morgan said.

Copper prices advanced on Friday, supported by a softer dollar and data from China that showed factory activity surprisingly expanded in November.

Copper on the London Metal Exchange edged towards $8,500/metric ton.

The dollar eased as traders weighed data that showed inflation was easing, stoking expectations that interest rates had peaked and central banks would soon start cutting rates.

Metal prices were boosted after data showed China's factory activity unexpectedly expanded in November, driven by rising orders-- Caixin survey.

Gains were limited on worries about how well China's economy is performing, showing manufacturing activity shrank for a second straight month in November and at a quicker pace.

Arabica coffee at the Intercontinental Exchange in New York rose nearly 7 per cent on Thursday following a sharp reduction in exchange coffee stocks.

March arabica coffee settled up 7 per cent at $1.84 per lb after touching a five-month high of $1.86.

The sharp price spike was due to the reduction of exchange-certified arabica coffee stocks to the lowest level in 24 years.

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