Commodities: Crude falls ahead of API stockpiles data; more downside forecast

Crude-oil futures are down heavily Tuesday as markets look to an expected rise in American Petroleum Institute's weekly stockpile figures out later tonight, with traders taking a view that the black liquid's price may yet fall further.

At about 15:24 GMT, on the energy front, Nymex-priced WTI crude was down 1.02% to $47.73 a barrel, and Intercontinental Exchange-traded Brent was 0.7% lower at $51.26 a barrel.

Crude's present bout of weakness was due to widespread unease about Opec's ability to control prices amid the global supply glut and US shale output, with focus on the cartel's adherence to output pledges from late last year and their potential continuance beyond June.

Adding to the selling pressure bearing down on the entire complex, the spot US dollar index was down 0.65% to 99.76, near its lowest mark since 31 January.

The API figures, out at 20:30 GMT, were anticipated to show rising stocks last week, after a surprise drop previously.

SwissQuote said the bearish pressure on crude continued on Tuesday despite bounce due to a short-squeeze.

"The commodity had been unable to mount a serious challenge to resistance (for WTI) at $49.61 (a barrel)," it said, noting hourly support was at $47.09.

"We consider that further weakness are very likely."

Against this fabric, Monex Europe noted the pressure on crude prices came after hedge funds positioning revealed a sharp contraction of long positions.

Turning to metals, on Comex, gold was up 0.5% to $1240.20 an ounce, with silver up 0.47% to $17.52 an ounce and copper down 1.61% to 262.40 cents a pound.

FXTM research analyst Lukman Otunuga said a vulnerable dollar had supported gold on Tuesday.

"With the lingering impacts of last week's 'dovish hike' (by the Fed) still reverberating across the board, bulls may exploit this period of ongoing dollar weakness," said Otunuga.

"While additional gains may be realised in the short term, the upside could be limited in the longer term when the dollar regains its attitude."

SwissQuote added that gold's sharp rise had all but invalidated what was a bearish short-term outlook.

"The momentum seems back to bullish. Key resistance is located at $1263 (an ounce). Hourly support can be found at $1224.10," said SwissQuote in a note.

"In the long-term, the technical structure suggests that there is a growing upside momentum."

Finally, three-month industrial metals on London Metals Exchange were mixed. The prices for copper and zinc fell firmly, while those for alumium and tin were ahead modestly.