Crude oil prices fell by more than $1 a barrel on Wednesday ahead of the latest US weekly inventories data while base metals moved lower and sugar prices remained under pressure.
Risk appetite and sentiment towards commodities was subdued following a downgrade to Portugal’s credit rating to AA- by Fitch, the ratings agency.
Crude oil prices retreated with Nymex May West Texas Intermediate down $1.17 to $80.74 a barrel while ICE May Brent lost $1.20 to $79.50 a barrel.
US crude stocks were expected to have risen for an eighth week in succession, up 1.5m barrels last week, according to a poll of analysts by Reuters.
Distillate stocks (including heating oil) were expected to have fallen 1m barrels last week.
Nymex April heating oil fell 3.1 cents, or 1.5 per cent, at $2.0711 a gallon.
Petrol inventories were seen declining 1.3m barrels.
Nymex April RBOB gasoline lost 3.3 cents, or 1.5 per cent, at $2.297 a gallon.
Sugar prices remained under pressure after their recent pounding as buyers remained in the sidelines, waiting for the market to stabilise after heavy selling.
ICE May raw sugar rose 1.1 per cent to 16.75 cents a pound on Tuesday but Liffe May white sugar remained below the $500-a-tonne level, down 0.9 per cent to $469.3 a tonne.
Strength in the dollar dragged gold below the $1,100 a troy ounce level, with it trading at $1,096 after ending Tuesday’s session in New York at $1,102.15.
Gold has sunk below its 50-day and 100-day moving averages within recent days. Analysts said further gains for the dollar could encourage short-term momentum players to bet more aggressively on weakness for gold prices.
Base metals moved lower with copper down 1 per cent at $7,372 a tonne while aluminium lost 0.7 per cent at $2,233.215 a tonne.
Lead fell 3.2 per cent to $2,050 a tonne amid concerns about oversupply and rising stock levels.
Lead inventories in London Metal Exchange warehouses have reached their highest levels in more than six years and look set to increase further.
Brook Hunt, the consultancy, noted that global lead production outpaced demand by more than 200,000 tons last year.
“We expect the refined market surplus to be at least as high as last year, if not higher,” said analyst Helen Matthews: “I see no reason why LME stocks should start to fall soon, unless there is a significant upturn in lead demand.”
