Commodities: energy sell-off continues - ANZ

Analysts at ANZ noted that commodities were mixed, with industrial commodities stronger while the sell-off in the energy market continued.

The sell-off in the crude oil market continued as OPEC struggled to agree to who would cut production. The technical meeting in Vienna failed to resolve differences around current production levels. Data also showed that output at various producers continues to rise. Russian output hit 11.205mb/d, while Libyan production increased to 640kb/d.

Industrial metals continued as it left off last week, with prices all ending the day higher. Zinc was the best performer, with investors attracted by strong fundamentals. Sentiment remains positive in the sector as the industry gathers for LME week in London. Iron ore prices inched higher despite inventories at Chinese ports continuing to climb. Stocks are now at 106.75 million tonnes, the highest since November 2014.

Gold surged higher on the back of safe haven buying after the FBI reopened its inquiry into Hillary Clinton’s use of a private email server.  The precious metal hit USD1,285/oz before some selling emerged late in the day.

Agriculture prices were largely weaker. Sugar touched its lowest price in eight months as bullish investors continued to cut their positions. Wheat was also lower after a USDA report showed global inventories will hit record levels in the 2016-17 season.

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