Commodity Capsule: Brent crude oil subdued; gold at three-month peak | Watch video

Commodity Capsule: Oil prices moved little on Tuesday, nursing some losses from the prior session and seeing little support as China presented a middling economic growth forecast for 2024. Speculation over the Israel-Hamas ceasefire and fears of worsening demand remained in play, largely offsetting a tighter outlook for supply.

Prices took some support from OPEC+ extending its current run of production cuts, this trend now appeared to have run out of steam.

Brent oil futures May steady under $83 a barrel, while West Texas Intermediate crude futures are off a recent four-month high to $78 a barrel.

China set a GDP target of 5 per cent for 2024, the same as the prior year. This, along with other economic proposals, was unveiled in an official report released during the 2024 National People’s Congress.

While Beijing outlined more economic changes to help shore up growth, there was much less optimism amid investors over an immediate economic rebound in China.

Weak private PMI data released on Tuesday further dented sentiment.

Concerns over China, coupled with uncertainty over the path of US interest rates, factored into anxiety over weaker oil demand in 2024.

Anticipation of hawkish signals from the US Federal Reserve this week kept markets on edge.

Gold prices clung to a three-month peak on Tuesday, supported by softer US manufacturing and construction spending.

Investors awaited Federal Reserve Chair Jerome Powell's testimony and key jobs data due this week.

US gold futures moved past $2,120, its highest since Dec. 4.

Market focus is on Fed Chair Powell's two-day congressional testimony on Wednesday and Thursday.

Economic releases due this week include Institute for Supply Management services data, Job Openings, and Labor Turnover Survey on Wednesday and non-farm payroll report on Friday.

Fed is under no urgent pressure to cut rates given the "prospering" economy and job market, Atlanta Fed President Raphael Bostic said on Monday.

Traders now see a 65 per cent chance for a June US rate cut, according to LSEG's interest rate probability app.

US natural gas futures dropped 1% on Tuesday to around $1.90/MMBtu

Natural gas surged 6 per cent on Monday, extending an 8 per cent gain in the previous week, as producers are scaling back operations.

On Monday, top US natural gas producer EQT announced a nearly one billion cubic feet/day reduction in production until March due to persistently low natural gas prices.

Chesapeake Energy cut its 2024 fuel production by around 30% due to recent price drops.

Antero Resources and Comstock Resources are among other firms planning drilling cutbacks this year.

Meanwhile, gas flow to LNG export terminals is expected to rise with the return to full power of Freeport LNG's facility.

Most nonferrous metals fell on Tuesday as traders were left disappointed at the lack of fresh supportive measures from China's key political meeting.

Copper on the London Metal Exchange was largely in range and weak around $8,500/metric ton.

Investors and traders have been awaiting fresh stimulus measures from China to boost economic growth and metals consumption, which has been subdued since the Lunar New Year holiday.

Beijing set a widely expected 5 per cent growth target for 2024, dampening risk sentiment across Asian equities markets.

The annual gathering of the country's parliament will last until March 11.

Discount of LME lead cash to three-month contract widened to $15.95/ton on Monday, the biggest since Jan. 18, as inventories in LME warehouses surged to the highest since May 2017 at 183,100 tons.

As China's parliament meeting kicks off, Premier Li Qiang's official work report has revealed the 2024 GDP target and highlighted a host of planned reforms to rejuvenate the economy. 

Beijing's approach still appears too cautious to boost investor sentiment, however.

Local governments' special bond issuance quota was set at 3.9 trillion yuan from 3.8 trillion; some had expected four trillion.

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