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Commodities: Crude oil lower as concerns mount on Opec production cut levels

By Andrew Schonberg

Date: Thursday 02 Mar 2017

Commodities: Crude oil lower as concerns mount on Opec production cut levels

(ShareCast News) - Crude-oil futures are firmly lower Thursday as concerns about the level of adherence to Opec production cut pledges resurfaced amid the lingering global glut of the black liquid and record US stockpiles.
At about 15:45 GMT, Nymex-priced West Texas Intermediate crude was down 1.62% to $52.96 a barrel, and Intercontinental Exchange-traded Brent was down 1.61% to $55.45 a barrel.

"Crude oil prices have come under pressure again after data showed that Iraqi exports rose in February," said Michael Hewson of CMC Markets UK in a statement.

He added that this confirmed previous data that OPEC production increased for that month, and cast doubt on the compliance narrative of near 90% (of promised output cuts) that we've been hearing from OPEC secretary general Barkindo over the past few days.

"With US stockpiles still at record levels and the US dollar looking strong the failure to push above recent highs has seen oil prices hit their lowest levels in two weeks," he said.

SwissQuote said earlier on Thursday that, for the moment, it ruled out any correction towards $49.61 a barrel for WTI. "We consider that further weakness are very likely."

Meantime, on Comex, gold was down 0.7% to $1241.30 an ounce, with silver down 0.59% to $18.38 an ounce and copper down 1.46% to 269.6 cents a pound.

"The yellow metal has until now been very resilient to dollar strength, possibly a reflection of the political risk environment," said Craig Erlam, senior market analyst at Oanda.

He was referring to US President Donald Trump, Brexit and France's elections making investors a "tad uneasy". Its weakness was also linked to speculation this week and last about a potential US rate rise, which had dented the safe-haven appeal of the yellow metal.

"Gold is trading around half a percentage point lower today and should we see a break below yesterday's low -- around $1,236.45 -- it could trigger a sharper sell-off.

Three-month industrial metals on London Metals Exchange were higher. Tin was the biggest gainer at 1.56%, followed by zinc up 1.31%, aluminum up 1.3% and copper up 0.72%.

Among agriculturals, Chicago Board of Trade-priced corn was down 0.46% to 380.25 cents a bushel, with wheat down 0.11% to 456.5 cents a bushel.

On ICE, cocoa was down 1.16% to $1875 a MT, with cotton No.2 up 1.18% to 78.78 cents a pound. Live cattle fell 0.34% to 117.18 cents a pound.

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