< Back to News

Oil Retreats Below $47 Before OPEC Meeting as Metals Snap


Oil retreated back below $47 as OPEC members failed to bridge their differences on production cuts, while a rally in metals ran out of steam. European and developed Asian stocks slipped as investors weighed Donald Trump’s stimulus plans against threats to markets from Italy’s referendum.

Crude futures pared Monday’s gains as Iraq and Iran raised objections with OPEC officials over how to distribute output reductions, referring the issue to ministers for further consideration. Copper slumped for the first time in seven days. European shares and developed Asian stocks slid, while those in emerging markets generally performed better. The Bloomberg Dollar Spot Index steadied after a two-day loss.

“What we are seeing now is a tug of war among OPEC members to get their share of the pie,” Son Jae Hyun, a global market analyst at Mirae Asset Daewoo Co., said by phone from Seoul. “If a deal isn’t made this time, none of them will benefit.”

The impact of President-elect Trump’s surprise victory on the dollar and commodities is waning, and traders are divided on how long China will be able to stabilize its economy while cooling its property market. Investors are also focused on the Organization of Petroleum Exporting Countries’ ministers meeting due this week in Vienna, with Saudi Arabia saying oil output cuts may not be required to stabilize prices.


West Texas Intermediate crude slipped 0.9 percent to $46.64 a barrel as of 8:06 a.m. in London, after rising 2.2 percent on Monday.

Copper futures dropped 1.6 percent on the London Metal Exchange, nickel lost 2.2 percent while zinc declined 1.5 percent.

Gold for immediate delivery fell 0.2 percent following last session’s 0.9 percent jump.


The euro was down 0.1 percent at $1.0605, while the yen weakened 0.3 percent to 112.31 per dollar.

Bloomberg’s dollar gauge, which tracks the greenback against 10 major peers, was little changed after a two-day decline.

“Given that he hasn’t even taken office yet, the Trump rally hasn’t become completely obsolete yet as a theme,” said Ayako Sera, a Tokyo-based strategist at Sumitomo Mitsui Trust Bank Ltd. “But given the big events coming up this week, it’s probably the most sensible thing to do for investors to stay away from trading strongly.”

The South Korean won edged 0.1 percent higher as President Park Geun-hye said she’s willing to resign after an influence-peddling scandal.

The Chinese yuan gained 0.2 percent after the central bank strengthened the fixing versus the dollar for a second straight day.

South Africa’s rand weakened 0.8 percent. President Jacob Zuma survived the most serious challenge to his leadership yet, after a contingent of top officials failed to force him from office during a meeting of the ruling party’s National Executive Committee.


The Stoxx Europe 600 Index opened down 0.5 percent. Raiffeisen Bank International AG tumbled 3.3 percent.

About the same number of stocks fell as rose on the MSCI Asia Pacific Index, which lost 0.1 percent. Japan’s Topix Index, Australia’s S&P/ASX 200 Index and New Zealand’s S&P/NZX 50 Index were all little changed.

The Jakarta Composite Index rose 0.9 percent, the biggest gain among Asian developing-nation equity benchmarks, as India’s Sensex advanced 0.8 percent.

The Hang Seng China Enterprises index and Shanghai’s benchmark swang between gains and losses. The central bank is clamping down further on mortgage lending in areas deemed overheated, people with knowledge of the matter said.

Futures on the S&P 500 rose 0.1 percent after the underlying benchmark fell from an all-time high Monday, losing at least 0.3 percent.


Japan, New Zealand and Australian government bonds were all little changed.

Ten-year Treasuries yielded 2.31 percent, after falling five basis points last session.

Similar-maturity U.K. gilt yields slid four basis points, while those for bunds were little changed.

Source: Bloomberg