Commodity Capsule: Brent crude oil slips; copper rise; gold softens

Commodity Capsule: Oil prices retreated further from 10-month highs on Wednesday ahead of the US Federal Reserve's interest rate decision, with investors uncertain when peak rates will be hit and how much of an impact it will have on energy demand.

Prices fell despite a bigger-than-expected draw in U.S. oil stockpiles and weak U.S. shale output that indicated tight crude supply for the rest of 2023.

Investors are awaiting a raft of central bank interest rate decisions this week, including one by the US Federal Reserve on Wednesday, to assess the outlook for economic growth and fuel demand.

Fed is widely expected to keep interest rates on hold, but the focus will be on its policy path, which is unclear.

US crude oil stockpiles fell last week by about 5.25 million barrels, American Petroleum Institute figures on Tuesday.

US oil output from top shale-producing regions is on track to fall to 9.393 million bpd in October, the lowest since May 2023.

Copper edges up on softer dollar ahead of Fed decision

Copper prices edged up in London on Wednesday as a softer dollar made greenback-priced metals cheaper to holders of other currencies.

The dollar index edged down slightly ahead of the US Federal Reserve policy meeting later in the day where it is expected to leave the benchmark overnight interest rate unchanged.

LME Copper inventories are building in LME-registered warehouses, with stockpiles at 149,600 tons the highest since May 2022.

Copper inventories in SHFE warehouses had been rising for four weeks straight and were at 65,146 tons by Sept. 15, the highest since July 21.

Combined nickel inventories in SHFE and LME warehouses were at 46,055 tons, the highest since March 30.

LME Lead stockpiles in warehouses leaped to 71,050 tons, the highest since July 2021. SHFE lead inventories climbed to 79,711 tons, a level unseen since September 2022.

However, Zinc stocks in LME warehouses have been falling to 115,350 tons, the lowest since August 14.

Gold softens ahead of US Fed's policy decision

Gold prices fell on Wednesday after hitting a two-week high in the last session.

Markets await the US Federal Reserve's policy decision for an updated outlook on the economy and monetary tightening path.

US December gold futures hovering past $1,950.

Treasuries wobble ahead of the Fed outcome as some investors are buying into the weakness, confident that a peak in interest rates will eventually lift the market for U.S. government debt.

Treasury Secretary Janet Yellen said US growth needed to slow to a pace more in line with its potential rate to bring inflation back to target levels since the economy was operating at full employment.

Agri commodities updates

CBOT soybean prices hit a five-week low of $13.08 a bushel on Tuesday as US crops struggle to compete with Brazilian supply.

Chicago wheat futures regained some ground supported by uncertainty over exports from Ukraine and expectations that dry weather will reduce output in Australia and Argentina.

Corn held onto most of the gains made on Tuesday as the US harvest gets underway. The grain is sitting near 33-month lows amid a global supply glut.

Malaysian palm oil futures traded in a tight range on Wednesday, as market participants weighed weak shipments from Malaysia and support from a weak ringgit.

ICE Raw sugar futures on ICE rose to the highest in 12 years on Tuesday on fund buying against the backdrop of production difficulties in Asia

October raw sugar ​hit a peak of 27.62 cents, the highest since October 2011.

The market remains underpinned by concerns that drier-than-normal weather is likely to reduce output in India and Thailand.

December arabica coffee settled up past $1.60/lb, having hit the highest in 1-1/2 months.

Dealers said the quality of this season's crop in Brazil has been lower than last season.

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