Commodity Capsule: Brent crude oil rebounds; copper slips; gold inches higher from 3-weeks low

Commodity Capsule: Oil prices rebounded on Thursday as markets turned their attention back to a tighter crude supply outlook for the rest of 2023 with demand set to stay robust through to next year.

Saudi Arabia and Russia's extension of oil output cuts to the end of 2023 will mean a substantial market deficit through the fourth quarter, the IEA said, as it largely stuck by its estimates for demand growth this year and next.

Organization of the Petroleum Exporting Countries on Tuesday retained its forecasts for robust growth in global oil demand in 2023 and 2024.

Both benchmarks touched 10-month highs on Wednesday before data showed a surprise build in US crude and fuel inventories that worried markets about demand.

US crude inventories rose by 4 million barrels last week, pausing five weeks of straight fall in inventories. 

The latest reading of US inflation bolstered expectations the Federal Reserve will not raise interest rates next week and could extend its pause further, buoying hopes of strong oil demand.

"We see the (oil) market tightening significantly over the next three months," said ANZ and maintained its end of year oil price target of $100/bbl.

Copper weighed down by rising stocks, China demand concerns

London copper prices slid on Thursday, weighed down by rising inventories and a clouded outlook for demand from China.

Copper stocks in LME warehouses jumped 7,750 tons on Wednesday.

The higher inventories, which were near a two-year peak, raised concerns of weak demand, analysts at ANZ said in a note.

Chinese market participants said demand had remained flat this time amid a patchy economic recovery.

The dollar index dipped after data showed a moderate rise in underlying U.S. inflation and the market viewed the Fed would hold rates steady at its policy meeting next week.

Gold crawls higher from three–week lows as US dollar, yields slip

Gold futures hover close to a three-week low. The most active contract prices reached their lowest since August 22, 2023.

The downturn in gold prices comes as the latest US consumer price index data failed to provide clarity on the Federal Reserve's policy outlook. 

December gold hovers past at $1,930/ounce on COMEX.

Silver trades past a three-week low near $23.

Traders were mostly betting that the Fed will leave interest rates unchanged at its Sept. 19-20 policy meeting, while pricing around a 44 per cent chance of another hike before 2024.

Weakening economic growth prospects in Europe coupled with a fall in confidence in the Chinese economy is favouring a higher US dollar and constraining gold's investment appeal, ANZ analysts said in a note.

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.