Commodities: WTI futures gain on supportive IEA data, Barclays bullish

Alexander Bueso Sharecast | 13 Jul, 2017 18:47 | | |

corn, field, farm

Commodities were on the backfoot across the board on Thursday save in the energy space - especially - amid a slight rebound in the greenback.

Energy futures found a bid, with West Texas Intermediate for prompt month delivery on NYMEX gaining 1.23% to $46.05 a barrel as of 1815 BST.

In parallel, Bloomberg's commodity index was down by 0.65% to 82.11, with the US spot dollar index up by just 0.08% to 95.84, although the latter had come well of intra-session lows of 95.46.

That came as the IEA said in latest market report that compliance with OPEC's latest output cut deal fell to 78% in June, the least over the first six months of the agreement.

To take note of as well, data released overnight showed Chinese commodity import volumes hit record highs in June. Iron ore and refined petroleum product imports saw notable accelerations in their year-on-year rates of growth.

Commenting on the outlook for crude oil in the second half of 2017, analysts at Barclays Research said they were "bullish", predicting WTI would trade at $47 and $52 a barrel on average over the last two quarters of the year.

"The recent price move appears to have been driven by a reassessment of producer break-evens, China concerns, Libya and Nigeria return. We think price action is the only factor that can moderate US production growth.

"Yet, outside the US, fundamentals seem to be improving. And we expect inventory draws from the OECD in the second half of this year. Product inventory levels are close to five-year normals in the OECD."

Copper on the other hand was retracing some of its recent advances, with the September 2017 contract falling 0.73% to $2.6645 a pound on COMEX.

Nevertheless, on a medium-term basis analysts at Deutsche Bank turned more positive on Thursday, projecting that a tighter market on the heels of Chinese demand for A/C and electric vehicles would push the red metal towards $3.0 a pound by 2019.

Precious metals were also giving back some of Wednesday's Fed-inspired gains after US central bank chief provided a somewhat more 'dovish' assessment of the outlook for monetary policy in the States.

The COMEX September silver contract was off by 1.21% to $15.70/oz. with platinum giving back 1.09% alongside it to trade at $906.60/oz..

Losses were even steeper on the Chicago Board of Trade, with September corn down by 3.44% at $3.7225 a bushel.

However, ICE-traded cocoa was higher by 3.24% at $1,880 a metric tonne.

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