Crude oil saw little movement on Thursday as investors assessed the impact of U.S. sanctions against Russia. Powell, the Federal Reserve Chair, dampened market expectations for interest rate cuts in his remarks on Wednesday, leading to a rebound in the dollar on Thursday that weighed on base metals like copper. Gold rose after consecutive declines.
Crude Oil: Little Change in Oil Prices as Traders Assess Impact of U.S. Sanctions
Crude oil prices remained largely unchanged for the second consecutive day as investors awaited clarity on how U.S. sanctions against key Russian producers would affect supplies to India.
WTI crude oil rose by approximately 0.1%, closing below $61 per barrel. Following the U.S. blacklisting of two major Russian producers last week, some Indian refiners have suspended purchases of Russian oil. However, earlier this week, India’s Oil Minister stated they would “never stop” buying Russian crude oil.
The head of TotalEnergies stated on Thursday that he believed the oil market had underestimated the impact of the sanctions.
Traders are closely watching the next moves of Russia’s largest oil buyer for clues on how U.S. sanctions may affect the global supply-demand balance.
Federal Reserve Chair Powell reduced market expectations for another interest rate cut in December during his remarks on Wednesday, adding pressure to oil prices.
The OPEC+ producer group will discuss production policy on Sunday and is expected to focus on restoring a small portion of output in December, a move that could exacerbate traders’ concerns about a global oversupply.
WTI crude oil futures for December delivery rose by 0.15%, settling at $60.57 per barrel.
December Brent crude oil futures rose by 0.12%, reaching $65 per barrel.
Base Metals: Copper Prices Retreat from Record Highs
Copper prices retreated from the record highs reached in the previous trading session on Thursday, as the U.S. dollar was bolstered by the Federal Reserve’s downplaying of interest rate cut expectations.
Federal Reserve Chair Powell warned investors on Wednesday that they should lower their expectations for further monetary policy easing in December. The Bloomberg Dollar Spot Index rose as much as 0.6% on Thursday, marking its largest gain in more than three weeks, thereby diminishing the appeal of dollar-denominated commodities.
On the London Metal Exchange, benchmark copper prices fell as much as 3.3% during the session, the largest intraday decline since October 14, after having surged to a record high of $11,200 per ton on Wednesday.
As of the close of the London market.
LME copper declined 2.4% to $10,917 per ton;
LME aluminum dropped 0.8% to $2,863.5 per ton;
LME nickel fell 0.9% to $15,230 per ton;
LME zinc decreased 1.5% to $3,037.5 per ton;
LME tin slid 1.1% to $35,792 per ton;
LME lead futures fell 0.2% to USD 2,022 per tonne.
Precious Metals: Gold Prices Rise
Gold prices rebounded from consecutive declines, rising more than 2.4% after having fallen nearly 5% over the previous four trading sessions.
The Federal Reserve cut interest rates again on Wednesday, in line with market expectations, but Fed Chair Powell downplayed the likelihood of a rate cut in December during the press conference following the meeting.
As of 3:36 PM EST, spot gold was up 2.4% at USD 4,023.5 per ounce.