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Commodities: Prices bounce as OPEC+ cuts output, US dollar dips

By Alexander Bueso

Date: Sunday 09 Dec 2018

Commodities: Prices bounce as OPEC+ cuts output, US dollar dips

(Sharecast News) - Commodity prices rebounded at the end of the week, as the US dollar slipped following the release of a weaker-than-expected reading on US non-farm payrolls for the month of November and after the Organisation of Petroleum Exporting Countries and its allies announced that they had decided to cut their supplies.
Energy futures were higher across the board, albeit off their session highs, after OPEC+ announced its decision to cut its combined output of crude oil by 1.2m barrels a day starting from January.

Front month Brent crude oil futures gained 2.68% to finish at $61.67 a barrel, although that was well beneath the contract's intra-day high of $63.73.

Meanwhile, natural gas futures were higher alongside, climbing by 3.72% to $4.49/MMBtu on NYMEX.

Nevertheless, it was a generally risk-off session across the globe in the wake of news, on Thursday, that Canadian authorities had detained one of China's top tech executives for her possible extradition to the States.

"The weakness in equity markets continued today from Asia through to the Western bourses, the trigger for which may have been the arrest of the Huawei CFO in Canada (last Saturday) at the request of US authorities suspecting the company of US sanctions violations," said traders at Sucden Financial.

"The action, clearly negative for US/China relations may hinder trade talks and is yet another blow to fragile market sentiment."

Precious metals also benefited from the dip in the Greenback's value, with February gold on COMEX adding 0.72% to $1,252.60/oz..

But outside of lead, all the main base metals futures on the LME ended lower, with three-month copper dropping from $6,165 per metric tonne at the open to $6,070.

Agricultural futures were mostly higher too, with March wheat on CBoT rising by 3.06% to $5.3125 a bushel.

From a bird's eye view, the US dollar spot index fell 0.31% to 96.5140 while the Bloomberg commodity index jumped 1.48% to 83.49.

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