Commodities: Mostly stronger performance - ANZ

Analysts at ANZ note that commodities were mostly stronger in the previous session, though there was some evidence of consolidation. Supply remains a key focus for the market.

Key Quotes

“Oil prices posted further gains overnight as US inventory numbers confirmed that a drawdown was in train. This was further helped by news that Saudi Arabia has been reducing its shipments to the US to help reduce the stockpile, and that in August the Saudi’s will further crimp its exports.” 

“Base metals were mixed despite the weaker USD helping to some degree. Copper outperformed after a major copper producer said that they believed the market would be in deficit soon.” 

“Iron ore bucked the trend in other commodities and declined, but the move came on the back of strong gains and is more likely consolidation, than the beginning of a broad reversal. Strong steel prices, and a solid report on aggregate financing in China, should be enough to see iron ore resume its upward path.”

“Gold was up modestly, in line with the weaker USD. The market continues to watch geopolitical events closely, but last night they were off radar with little change in the situation in Washington, Russia or on the Korean peninsula.”