The Commodities Feed: Stronger dollar weighs on commodities

Energy – Oil slips as Middle East output rebounds Oil prices edged lower this morning, with Brent around $91/bbl as recovering Middle East supply eased immediate concerns over availability. OPEC crude production increased by almost 2m b/d in October to 27.16m b/d, led by Saudi Arabia, Iraq and Kuwait. Saudi production climbed to 9.2m b/d, close to pre-war levels, while Iraq produced almost 4.5m b/d.

Regional crude flows are approaching pre-war levels, but exports continue to rely on alternative routes around the Strait of Hormuz, leaving supply vulnerable to further disruption. OPEC kept its demand forecasts unchanged, expecting global oil demand growth of 200k b/d this year and 2.6m b/d in 2027. We expect volatility to remain elevated, with the pace of normalisation through Hormuz still the key driver for the outlook.

Metals – Copper drops to trade near four-month low Copper traded near a four-month low this morning as renewed selling in technology stocks and a firmer US dollar weighed on the metals complex. LME prices briefly fell to $13,657/t. The market has pulled back from September’s record near $15,000/t, with investors reassessing expectations for AI-related demand while uncertainty over US import tariffs remains unresolved. Further dollar strength could keep copper under pressure in the near term.

Aluminium was also slightly weaker, although nearby LME spreads remain exceptionally tight. Cash metal traded at a premium of more than $150/t to the three-month contract this week, pointing to continued short-term supply constraints.

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