Commodity Capsule: Brent crude oil rises; gold hits 1-week low; base metal falls | Watch video

Commodity Capsule: Oil prices hovering 10-month high, as markets are worried about supply shortage after Saudi Arabia and Russia extended their voluntary supply cuts to year-end.

Investors had expected Saudi Arabia and Russia to extend voluntary cuts into October, but a three-month extension was unexpected.

Rystad estimated global liquids demand will surpass supply by around 2.7 million bpd in the next quarter.

Reflecting supply concerns in the near term, the front-month Brent futures traded near nine-month highs at $4.10 a barrel above prices in six months.

For WTI futures, the spread between front-month and six-month contracts widened to as much as $4.47 a barrel on Wednesday, hovering near 9-month highs.

Saudi Arabia will extend its voluntary oil output cut of one million barrels/day for another three months.

Russia extended voluntary decision to reduce oil exports by 300,000 bpd to the end of this year--Deputy PM Alexander Novak.

Gold hits one–week lows on elevated US dollar, yields

Gold slipped to one-week lows on Wednesday, falling further after posting the biggest intra-day decline in a month in, the last session.

US Treasury yields and the dollar advanced on expectations that interest rates are likely to remain high.

Spot gold posted its biggest one-day loss since August 1 on Tuesday.

The US dollar rose to near six-month high near 105, while benchmark 10-year bond yields reached their highest level in over one week, nearing 4.25 per cent.

Federal Reserve Governor Christopher Waller said the latest round of economic data was giving US central bank space to see if it needs to raise interest rates again.

Global business activity largely slowed further last month as services firms struggled in the face of weak demand as rising prices and borrowing costs made indebted consumers rein in spending.

Base metals fall on dollar strength, global economic worries

London industrial metals slid on Wednesday, weighed down by strong U.S. dollar and renewed global economic concerns.

The dollar index hovers near a six-month peak; Under the 105-mark level

Orders for U.S. factory goods declined in July, nearly reversing last month's rise and ending a 4-month streak of gains—U.S. Commerce Department.

Comments by the Federal Reserve Governor raised fears of more interest rate hikes in the US.

Data released by China and Europe lately reinforced slowing economic activities and fanned fears over an economic recession.

In China, services activity expanded at the slowest pace in eight months in August-- the private-sector survey.

China's trade data due on Thursday is also in focus; Exports and imports in August are likely to contract more slowly.

White sugar futures rose to a 12-year high

White sugar futures rose to a 12-year high, as drier-than-normal weather threatened to curtail production in India and Thailand.

October white sugar ​​went past $750/Tonne, after touching a 12-year high

Sugar prices in India have jumped by over three per cent in a fortnight to their highest in six years, driven higher by production concerns raised by limited rainfall in growing regions.

October raw sugar ​​inched closer to 27 cents/lb,​​ hitting over a four-month high, buoyed by fund buying.

French sugar and ethanol maker Tereos said it has raised the price to be paid to farmers for the sugar beet harvest, to reflect a rise in sugar prices.

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