Commodities: Oil futures slide on Saudi comments

Oil futures headed lower on Friday, after Saudi Arabia said it would freeze production only if other major producers did the same.

Ahead of an oil producers' conference in Doha on 17 April, where the freezing of oil output is due to be discussed, Saudi Deputy Crown Prince Mohammed bin Salman told Bloomberg: “If all countries agree to freeze production, we will be among them.”

He added that Iran needed to be among those countries “without a doubt.” The comments come as Iran has decided not to attend the Doha talks.

Meanwhile, a Reuters survey published earlier this week indicated that OPEC’s oil production rose in March, having stabilised in February, following higher production from Iran and near-record exports from southern Iraq.

The latter alone produced over four million barrels per day, second only to Saudi Arabia among all of OPEC's 13 member nations.

At 1728 BST, the Brent front month futures contract was down 4.07% or $1.64 to a two-week low of $38.69 per barrel. Concurrently, WTI futures, already on a slide in wake of a bearish US inventories report published earlier in the week, fell a further 3.57% or $1.37 to $36.97 per barrel.

Naeem Aslam, chief market analyst at AVATrade, said, “Saudi Arabia has made it clear again that it is all about the market share and it has no interest in freezing its output when the rival country, Iran, has intentions to pump as much oil as they can.

“The Doha meeting has become even more interesting now because the Saudis have no obligations any more. The bigger question is what the other OPEC members will do on the back of this? Oil is under pressure after this news and the traders are booking profits.”

Away from oil markets, precious metals also headed lower as the dollar strengthened. The COMEX gold June futures contract fell 1.83% or $22.60 to $1213.00 an ounce, while spot gold was down 1.53% or $18.80 to $1,213.95 an ounce.

COMEX silver fell 4.04% or 62 cents to $14.84 an ounce, while spot platinum also slid 2.40% or $23.42 to $952.28 an ounce; retreating further from the psychological $1,000 an ounce level.

Headline base metal futures saw mixed trading across the London Metal Exchange board. At 1635 BST, three-month futures contracts of copper (-0.5%) and tin (-0.5%) were on negative turf. However, primary aluminium (+2.2%) and zinc (+3.6%) saw decent gains, while nickel was broadly flat.

Liz Grant, senior account executive at Sucden Financial, said, "Copper made some headway towards $4,900 but failed to clear marking a disappointing end to the week. Overall LME turnover was moderate.”

Finally, agricultural commodity futures were firmly in negative territory. CBOT corn (-0.64%), wheat (-0.32%), CME live cattle (-0.08%) and ICE cocoa (-2.34%) futures slipped in early trading calls stateside.