Commodity Capsule: Brent crude oil range-bound; gold steady, base metal rise

Commodity Capsule: Oil prices were range-bound on Wednesday, after posting four sessions' worth of losses.

Markets weighed the effectiveness of OPEC+ cuts on supplies and worries of a worsening demand outlook in China.

Brent crude futures are moving around $77 a barrel, the weakest level since mid-November. U.S. WTI crude futures are trading around $72 a barrel.

The US crude oil benchmark is at its lowest level since July 6, with WTI seeing four consecutive days of decline.

OPEC+ has agreed on voluntary output cuts of about 2.2 million barrels per day for the first quarter of 2024 late last week. 

The reduction includes an extension of Saudi and Russian voluntary cuts of 1.3 million bpd.

Moody's lowered the outlook on China's A1 rating to negative from stable, amid dull economic growth and ongoing downsizing of the property sector.

China will release preliminary trade data, including crude oil import data, on Thursday.

Base metal prices rose on Wednesday from their recent multi-week lows.

Investors and traders took increasing bets that the US monetary policy tightening cycle might be over after US job openings fell to a 2.5-year low in October.

LME Copper rose to $8,400/metric ton, after having dropped $300 from a four-month high touched last week past $8,600 a ton.

Concerns over China surged this week after rating agency Moody’s flagged a potential downgrade to the country’s credit rating.

Signs of continued economic weakness in China pushed up concerns over declining copper demand in 2024. 

Gold prices steadied on Wednesday, as the dollar levelled with bets for an interest rate cut by the Federal Reserve in the first half of 2024.

The market eyes key US jobs data this week that could offer more clarity on the central bank's rate path.

US gold futures for February delivery rose past $2,040.

Bullion had climbed to a record high of $2,151 on Monday, before dropping $100 in a single day, amid uncertainty over the timing of monetary policy.

The dollar index is hovering near a two-week high, while yields on 10-year Treasury notes ticked under at 4.2 per cent.

Traders are pricing in about a 60 per cent chance of a rate cut by March next year.

Investors are awaiting U.S. non-farm payrolls data on Friday.

Malaysian palm oil futures fell for the fourth session on Wednesday and hit a five-week low.

Palm oil is tracking weakness in rival vegetable oils despite the expectation of lower end-November inventories.

Palm oil February delivery on the Bursa Malaysia Derivatives Exchange slipped to 3,700 ringgit.

European Union palm oil imports so far in the 2023/24 season that started in July had reached 1.48 million tons by Dec ember 3 against 1.64 million a year earlier.

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