Markets turned down overnight Tuesday in a reversal of Monday’s bullish session with Wall Street lower and off the previous record highs, gold and oil weaker, along with iron ore prices.
That has seen the overnight ASX 200 futures trading fall more than 20 points, meaning the start to the session later this morning will see a bit of red and the opposite of Tuesdays 60 point, 1% surge.
The prices of BHP and Rio Tinto – both of which hit multi-year highs on Tuesday, will come under pressure after iron ore prices fell in China after a surge of over 5% or $US3 a tonne on Monday.
The Metal Bulletin said its 62% Fe Iron Ore Index price fell 70 cents or 1.1% to $US62.66 a tonne.
BHP jumped 3.9%, Rio Tinto rose 2.1% and Fortescue Metals rallied 4.8%. Woodside climbed 3.4% on Monday’s 3% surge in oil prices.
Banks also helped the market with the CBA, up 1%, ANZ, up 0.9%, and NAB, higher by 0.4%.
Oil prices weakened despite more signs from OPEC that its current production cap stands a very good chance of being extended to the end of 2018 at a meeting on November 30. US crude fell to $US57.29, Brent crude to $US63.75. Gold eased $US5 to $US1271 an ounce on Comex this morning. Comex copper futures fell 1% to around $US3.12 a pound.
Most of the OPEC countries, plus Russia and nine other producers, have trimmed oil output by about 1.8 million barrels per day (bpd) until March 2018 in an effort to eliminate a supply glut that has weighed on prices.
OPEC’s secretary general Mohammad Barkindo said on Tuesday, no country is unwilling to prolong the accord.
The cuts have helped push oil prices to two-year high, but a glut of stocks of oil and products remains.
Barkindo, who was speaking at a press conference for OPEC’s latest World Oil Outlook, said the recent rise in prices reflected improved market fundamentals and producers’ high adherence to the supply pact. Speculation about the outcome of the November 30 meeting will dominate oil markets for the next three weeks.
