Commodities markets summary

A summary of trading in key commodities markets overseas:


Oil prices have surged as the US government lowered its domestic production estimate and OPEC said it was "ready to talk" to producers about multi-year low prices.

Oil prices opened lower but pulled out of negative territory after the US Department of Energy said domestic production in June was 9.3 million barrels a day, about 100,000 barrels lower than its previous estimate. Monthly estimates for the January to May period were revised lower by as much as 130,000 barrels a day.

US production had been running at record levels since the beginning of the year, exacerbating the global oversupply situation.


Gold has steadied, bouncing from session lows as oil prices rallied and the US dollar fell, after bullion felt earlier pressure on indications the Federal Reserve may still raise interest rates this year, despite recent market turmoil.

"It was oil that sparked the short-covering (in gold)," said George Gero, precious metals strategist for RBC Capital Markets in New York.

"That meant that the funds that had shorts in crude probably also had shorts in gold, as they normally do."


Shanghai copper slipped on lingering worries over China's economy ahead of fresh factory data later in the week, but is set for a small monthly gain as a lull in demand over the summer petered out.

The relative health of domestic Chinese prices in the face of losses in London bodes well for import-driven demand over the next few months, said analyst Daniel Hynes of ANZ in Sydney.

"But it does feel like this little short-covering rally is fragile, so I'm a bit hesitant to call a bottom just yet. If we do see some positive economic data coming through, then that could be the impetus copper needs to gain some length."

The London Metal Exchange was closed for a bank holiday weekend.

Market Data

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