Commodity Capsule: Brent crude oil climbs; Gold slips | Watch video

Commodity Capsule: Oil prices climb as markets focus on supply tightness

Oil prices marked a swift recovery, from two-week lows in the last session, on Wednesday as markets focused on supply tightness heading into winter and a "soft landing" for the US economy.

According to the American Petroleum Institute, US crude oil stockpiles rose last week by about 1.6 million barrels, against analysts' expectations for a drop of about 300,000 barrels.

Markets continued to worry about US crude stockpiles at the Cushing, Oklahoma, storage hub falling below minimum operating levels.

Further, drawdowns at Cushing could provide new upward pressure on oil markets along with supply tightness stemming from supply cuts by OPEC+.

ANZ Research said in a note that Russia's recent export ban on gasoline and diesel "means upward pressure on crude oil demand from refineries.

Gold lingers five-week low as the US dollar keeps momentum

Gold prices were pressured on Wednesday and traded near their weakest levels in over one month touched in the previous session as the US dollar firmed on the back of a higher-for-longer interest rate scenario.

Spot gold hovers at $1,900/ounce level, hovering near its lowest since mid-August.

The dollar traded near a 10-month high against its major peers on Wednesday as Treasury yields stayed elevated on the prospect of higher-for-longer US rates. 

There is a 40 per cent chance that the Fed will need to raise interest rates "meaningfully" to beat inflation, Minneapolis Federal Reserve Bank President Neel Kashkari said on Tuesday.

US consumer confidence dropped to a four-month low in September, weighed down by persistent worries about higher prices and rising fears of a recession, though households remained generally upbeat about the labor market.

Market focus now turns to the personal consumption expenditures price index due on Friday.

Silver futures dropped under $23 per ounce, the lowest level since mid-September

Iron ore climbs as better – than – expected China data lifts sentiment

Iron ore futures rebounded on Wednesday, as better-than-expected industrial profits data in top consumer China buoyed sentiment, although lingering demand concerns amid persistent weakness in the country's crisis-hit property market remained a headwind.

Profits at China's industrial firms in August surged 17.2 per cent year-on-year, compared to a 6.7 per cent decline in July-- National Bureau of Statistics.

China's central bank said on Wednesday it would implement monetary policy in a "precise and forceful" manner to support economic recovery.

Copper buckles under global economic concerns, with a focus on China

Copper prices on LME are hovering four-month low near the $8,100 a tonne level.

Federal Reserve's cautious stance, concerns about potential US government shutdown, and worries about reduced industrial demand due to slowing Chinese economy.

Rising bond yields and a stronger dollar reduced the appeal of copper and other metals.

Federal Reserve indicated a likelihood of one more interest rate hike in 2023 signalling a prolonged period of elevated interest rates.

Tensions heightened over ongoing federal budget negotiations, with a looming deadline of October 1.

In China, the property sector faced further trouble as the major developer Evergrande missed a payment.

Commerzbank noted some improvements in the copper supply outlook and acknowledged increased downside risks to its year-end copper price forecast.

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