Commodity Capsule: Gold prices steady; Brent crude oil near 2-week high, copper climbs

Commodity Capsule: Oil prices hovered near a two-week high on Wednesday after rising more than 1 per cent in the previous session.

Jitters over global trade disruption and geopolitical tensions in the Middle East following Houthi attacks on ships in the Red Sea.

Brent crude futures edged past $79/barrel. WTI crude was hovering at $74/barrel.

Washington on Tuesday launched a task force to safeguard Red Sea commerce as attacks by Iran-backed Yemeni militants forced major shipping companies to reroute, stoking fears of sustained disruptions to global trade.

About 12 per cent of world shipping traffic passes up the Red Sea and through the Suez Canal.

Analysts see limited impact on oil supply so far, as the bulk of Middle East crude is exported via the Strait of Hormuz.

The US Energy Department bought 2.1 million barrels of crude for delivery in February bringing total purchases to about 11 million barrels to replenish the Strategic Petroleum Reserve (SPR).

Weak dollar index and benchmark US treasury yields lend additional support.

Copper on International exchanges climbed on Wednesday amid tighter global inventories, mine supply disruptions, and a weaker U.S. dollar.

Shanghai's January copper contract rose 69,270 yuan, to touch a three-month high following a rally in London prices amid mine closures and falling stocks in LME warehouses.

LME copper hovered close to $8600 a ton, near a three-week high, while LME Zinc is at 1 month and Aluminium is trading near the six-week high.

Anglo-American and Brazil's Vale have lowered production guidance for 2024 and 2025.

Anglo has reduced its guidance by 180,000-210,000 tons next year and by 150,000-180,000 tons in 2025, citing problems at its Quellaveco mine in Peru and a planned temporary closure at Los Bronces in Chile.

Vale's updated guidance, according to analysts at Macquarie Bank, would take a cumulative 100,000 tons off their mine supply forecasts through 2026.

Gold prices held steady above the key $2,000 level on Wednesday.

The yellow metal is supported by prospects of interest rate cuts from the Federal Reserve next year, with investors awaiting US inflation numbers later this week.

Last week, the Fed indicated its tightening phase was at an end and signaled that rate cuts are in the cards for 2024.

Atlanta Fed President Raphael Bostic said there is no current "urgency" for the Fed to reduce U.S. interest rates given the strength of the economy.

Markets are pricing in about a 75 per cent chance of a Fed rate cut in March.

The dollar was holding steady under the 102 mark but was hovering near its lowest level in four months touched last week.

Benchmark U.S. 10-year yields languished near their weakest since July.

March robusta coffee surged to a 15-year high of $2,952 in the previous session. 

The robusta market is supported by low stocks in major consuming countries and unfavourable weather in Brazil's robusta-growing region.

Vietnam was now about 75 per cent complete, but said farmers have been slow to sell waiting to see if the market climbs higher.

March arabica coffee rose 5.9 per cent to $2.024 per lb​​, the highest price since April.

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