Commodity Capsule: Brent crude subdued; gold near record high, copper at 2-month peak

Commodity Capsule: Oil prices were little changed on Wednesday after two straight days of losses.

Deadlock in Gaza ceasefire talks renewed uncertainty about security of supplies from the Middle East.

Brent crude futures were up marginally at $89.49/barrel. US WTI crude futures rose past $85 a barrel.

Prices for both benchmarks remain down around 1.8 per cent at the end of last week despite geopolitical tensions in the Middle East triggered by the prospect of Israel's war in Gaza lasting longer, and drawing in more countries.

Hamas said on Tuesday that an Israeli proposal on a ceasefire in their war in Gaza did not meet the demands of Palestinian militant factions, but it would study the offer further and deliver its response to mediators.

Meanwhile, US crude stocks climbed last week by 3.03 million barrels-- American Petroleum Institute figures. Analysts had estimated that stocks would rise by about 2.4 million barrels.

EIA said it expects Brent crude prices to average $88.55 a barrel in 2024, up from a previous forecast of $87 a barrel.

UBS Raises Oil Forecasts Higher By $5/bbl Across All Tenors, As It Increases 2024 Oil Demand Growth Estimates And Reduces OPEC+ Crude Production Projection For 2Q'24.

Gold prices hovered just below record highs on Wednesday.

Safe haven demand for the yellow metal was boosted in anticipation of key US inflation data and more cues on interest rates.

US gold futures edged 0.6 per cent higher to $2,375 per ounce, after having hit a record high of $2384 an ounce in the previous session.

US CPI data and minutes of the Fed's March policy meeting are due later in the day.

People’s Bank of China bought gold for a 17th straight month, with its pace of purchases showing few signs of stopping.

Previously Atlanta Fed President Raphael Bostic said, the US Federal Reserve may not cut interest rates at all this year if progress on inflation stalls and the economy continues to outperform.

Bond strategists upgraded their US Treasury yield forecasts for coming months as sticky inflation and resilient economic activity have pushed financial markets to temper expectations for Federal Reserve rate cuts this year.

Bank of America expects gold prices to average $2,500 an ounce by the fourth quarter of this year.

Copper sits at two two-year peak, more China cues awaited

Copper futures on the London Metal Exchange rose past $9,450 a ton

Red metal shines as markets bet on an improved outlook for copper demand amid growing conviction that a decline in global manufacturing had bottomed out.

Chinese copper supply is expected to tighten as several top refiners flagged production cuts in the coming months.

More economic cues from China are also due later this week. Inflation and trade data are due on Thursday and Friday, respectively.

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