Commodity Capsule: Oil near 10-month peak on supply tightness, Eyes on US inflation data

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Oil rose on Wednesday, firming its ground near a 10-month peak reached during trading a day earlier, as the market balanced supply concerns over Libya output and OPEC+ cuts with global macroeconomic headwinds.

Both benchmarks surged nearly 2 per cent on Tuesday to close at their highest levels since November 2022.

OPEC stuck to its forecasts for robust growth in global oil demand in 2023 and 2024.

Saudi Arabia and Russia last week extended voluntary supply cuts of a combined 1.3 million bpd to year-end.

EIA said global oil inventories were expected to fall by half a million bpd in the second half of 2023, with Brent averaging $93/barrel in the fourth quarter.

The market awaits US inflation data due on Wednesday, with year-on-year (YoY) core consumer price index increase expected to moderate to 4.3 per cent in August from a 4.7 per cent gain in July.

Gold prices dip as dollar and treasuries firm before CPI data

Gold prices fell on Wednesday, coming under pressure from renewed strength in the dollar and yields as markets hunkered down before the US inflation reading due today.

Bullion prices hit a two-week low as markets positioned for potentially stronger inflation readings, amid higher fuel prices and strong consumer spending.

Wednesday’s inflation reading is expected to set the tone for the Federal Reserve meeting next week. 

The dollar index hovered under a six-month peak, while benchmark 10-year Treasury yields remained within sight of over 20-year high.

US CPI data is expected to show that inflation grew 0.6 per cent in August, accelerating from the monthly pace of 0.2 per cent seen in July. 

Metals range bound, China cheer runs dry

Copper prices fell slightly on Wednesday, reversing some recent gains as a China-driven rally ran out of steam.

While recent data showed some improvement in China’s economy, overall sentiment towards China remained largely dim.

Focus is now on industrial production and retail sales data for August, due Friday, for more cues on economic activity. 

Global grains weaken post USDA supply-demand report

CBoT Soybean and corn hovering at three-week lows on better-than-expected supply outlook.

ICE Raw Sugar is hovering four months high close to 27 cents a lb

Speculator-led buying, Output concerns in Asian growing regions aid price rise.

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