Commodity Capsule: Brent crude oil reverse gains; gold edge higher; copper range-bound

Commodity Capsule: Oil prices backed off on Monday, reversing their Friday rally, amid renewed concerns over waning demand in the US and China.

Both benchmarks were well below the 100-day moving average.

Prices gained nearly 2 per cent last Friday as Iraq voiced support for oil cuts by OPEC+, but lost over 4 per cent for the week; its third weekly losses the first time since May.

US Energy Information Administration said crude oil production in the US this year will rise by slightly less than previously expected while demand will fall.

Per capita U.S. gasoline consumption could fall to the lowest level in two decades.

Weak economic data last week from China increased fears of faltering demand.

China's consumer prices fell to pandemic-era lows in October, casting doubts on the strength of the country's economic recovery.

Gold prices edged higher on Monday, although hovering pushed bullion to over a three-week low last week.

Investors look forward to U.S. inflation data after hawkish remarks from Federal Reserve Chair Jerome Powell.

Spot gold hovers around $1,940 per ounce, after slipping to its lowest since Oct. 18 on Friday.

Gold fell 2.8 per cent last week to register its worst week in 6 weeks as Powell's remarks pushed back any notion about interest rate cuts.

Focus this week will be on U.S. consumer prices index (CPI) data due on Tuesday that could influence the Fed's interest rate outlook.

Core CPI month-over-month is expected to have risen 0.3 per cent in October, with a year-over-year increase of 4.1 per cent.

London copper prices are largely range-bound on Monday, hovering at a week low.

Upbeat sentiment in the financial markets is tempered by a firm U.S. dollar and uncertainty over the economic recovery in China.

LME copper edges above $8,000/metric ton mark.

The dollar held firm over a one-week high against its rivals, past the 105.70 level.

Weak economic data last week from China raised concerns over the demand outlook.

Aluminium inventories in warehouses monitored by the Shanghai Futures Exchange rose by 10 per cent last week.

GOLDMAN SACHS -- "We now forecast Brent to rise to a 2024 average of $92/bbl (versus. $98 prior) given supply beats."

"We recommend going long commodities in 2024". Rapidly rising green demand and peaking supply sets the stage for sharp tightening in copper and aluminum into mid-decade.

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