Commodities: Brent's fall towards 200-day moving average continues apace

Crude oil futures were again trading on the back foot on Tuesday, following the broad cross-asset class price pattern seen on multiple occasions over the last few weeks, with oil futures lower, the US dollar higher and risk assets - including equities and junk debt - generally weaker globally.

Although on this occasion, natural gas futures were also coming under selling pressure.

As of 2030 GMT, West Texas Intermediate crude oil futures for delivery in January were down by a whopping 6.52% to $53.47 a barrel on NYMEX, having fallen below $53 a barrel at one point during the session. Similarly-dated Brent was off by 6.864% to $62.50 a barrel and quickly closing in on its 200-week moving average.

WTI was down by roughly 30% from its 2018 highs hit on 3 October, when it reached $76.41.

Some market commentary referenced investor caution ahead of weekly US inventory data due out the next day as a reason for the move, alongside uncertainty over at what point Russia or OPEC, or better both, might cut their combined output in order to boost prices.

Worth noting perhaps, as opposed to the recent past, weaker oil prices were now a drag on the US economy, Ian Shepherdson at Pantheon Macroeconomics had noted the day before.

From a fundamental standpoint, veteran investor Andy Hall reportedly told Bloomberg that prices had likely weakened due to the impact of the stronger Greenback on crude oil demand from emerging markets or on concern about the trade war between China and the US.

Hall's forecast was for "some sort of recovery" as OPEC moved to curb production over the next month or two.

As an aside, according to AME Consulting, by year-end Iraq's upgrade of the Kirkuk to Ceyhan pipeline was expected to allow shipments of 1.0m barrels per day, versus just 400,000 bopd at present - field performance permiting.

In parallel, the spot US dollar index was climbing 0.72% to 96.8880 even as the Bloomberg commodity index fell back by an outsized 2.45% to 82.75, leaving it just off its 52-week lows.

Natural gas futures on NYMEX were also weaker, retreating by 3.91% to $4.52/MMBtu.

Outside of aluminium, LME base metals were all weaker, amid what traders at Sucden Financial described as "pitifully low" trading volumes overnight.

"Copper traded quietly through the a.m session but following the US open and China night session open the market rallied sharply to just shy of 6300 resistance area before retreating just as quickly to a new low on the day at 6146 following a cliff edge fall in the Dow," analysts at Sucden said.