Commodities: Oil futures edge higher after on fresh report of OPEC output cuts
By Alexander Bueso
Date: Thursday 03 Jan 2019
(Sharecast News) - Energy futures added to the prior day's advance, buoyed by softness in the Greenback and further evidence of output cuts by the Organisation of the Petroleum Exporting Countries.
As of 2051 GMT, the Bloomberg commodity index was climbing 0.61% to 77.45 as the spot US dollar index shed 0.57% to 96.2640.
In parallel, Brent crude oil futures for prompt month delivery were 1.78% higher, fetching $55.89 a barrel on the ICE. Meanwhile, over on the NYMEX, February dated futures for RBOB gasoline and heating oil were up by 1.82% and 2.23% to $1.3497 and $1.7386 a gallon, respectively.
Weighing on the US dollar was a warning on revenues from US tech giant Apple and news that the ISM Institute's closely-followed factory sector Purchasing Managers' Index dropped to an over two'and-a-half year low after registering its largest drop for any single month since 2008.
According to a Reuters survey, and when compared to November, OPEC's members reduced their combined production by 460,000 barrels a day to 32.68m b/d last month - marking the largest decrease since January 2017.
Saudi led the way with a reduction of 400,000 b/d. The day before, Bloomberg had reported a 420,000 b/d reduction from Riyadh with total OPEC output down by an estimated 530,000 b/d.
Aiding the cartel's stated aim of cutting its production - together with that of its allies from outside, such as Russia - by 1.2m b/d starting in 2019, both Iranian and Libyan production declined in December, although exports from Tehran held up, Reuters reported.
Output from Iraq, Nigeria and Kuwait on the other hand rose.
Gold futures also added to recent gains, with the February contract on COMEX gaining 0.93% to $1,296.10/oz..
Base metals futures on the other hand weakened, with March copper on COMEX erasing 1.54% to change hands at $2.5825 a pound.
Over in the agricultural space, corn and wheat futures for March delivery traded on the Chicago Board of Trade rose by 1.96% and 1.38% to $3.7975 and $5.1375 a bushel, respectively.
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