Commodities: Brent recovers from intra-day lows, G-20 and end-of-year in focus
Commodities came under renewed selling pressure on Tuesday as the US dollar continued to push back towards its 52-week highs, even as traders continued to wonder aloud whether the Organisation for Petroleum Exporting Countries would finally coordinate to reduce its combined output.
Linked to the above, markets were also expectant ahead of the G-20 meeting at the weekend, where Saudi Crown Prince, Mohammed Bin Salman and Russian President Vladimir Putin, were expected to coincide a full week before OPEC ministers were due to meet in Vienna.
Nevertheless, given the recent political outcry over the assassination of Saudi journalist Jamal Khashoggi, some observers believed that Riyadh might be more careful about potentially riling the US President.
As of 1958 GMT, the US dollar spot index was rising by 0.30% to 97.3640 and was trading just a whisker beneath its 52-week highs of 97.6930, with the Bloomberg commodity index down by 0.37% to 81.15 which in turn was a fresh 52-week low.
Brent crude oil futures however had overcome earlier weakness and were dipping just 0.20%, changing hands at $60.36 a barrel.
Looking further out, strategists at TD Securities were rather positive, saying: "But, weakness could start to bottom out as it appears OPEC+ are committed to cutting production once again at their Dec 6th meeting, which should see the market tighten up.
"Furthermore, seasonal inventory dynamics should start to see barrels draw again and sour macro sentiment is likely overblown — as such, we anticipate that crude oil will begin to move closer to the fundamentals once again as we move into 2019."
Weighing on sentiment as well and putting a bid into the Greenback, overnight the US President warned in an interview with the Journal that it was "highly unlikely" that he would not go ahead with a planned hike in tariffs on Chinese goods.
Echoing a view held by other analysts, those at Sucden Financial were telling clients: " Although we have become accustomed to his timely ramp-ups in rhetoric, the president appears determined to push ahead with planned tariff increases in January. This leads us to wonder if there will be any significant outcome from the meeting with Pres Xi in Buenos Aries later this week."
All the main LME-traded base metals contracts finished the day lower, with those for copper sliding from $6,158 per metric tonne at the open to $6,121.5 by the London close.