Commodities Roundup: Oil prices fall to eight-month low as global stock market rout deepens

Oil and gold prices fell on Monday amid a broader sell-off in global equities amid growing worries about a U.S. recession.

Brent crude oil futures plunged to below $75.2 a barrel, hitting an eight-month low, while WTI crude oil futures plummeted to below $75.2 a barrel, hitting an eight-month low. Despite geopolitical tensions in the Middle East, futures fell below $72.5 a barrel, their lowest level in six months, as traders assessed weak demand in the world’s largest oil consumer.

A weaker-than-expected U.S. jobs report on Friday weighed heavily on risk assets. “The news points to a faster-than-expected slowdown in the U.S. economy, raising fears of a recession. This will only exacerbate lingering concerns about Chinese demand in the oil market,” ING analysts said in a report.

said Warren Patterson, head of commodity strategy at ING, and Ewa Manthey, commodity strategist.

On the corporate front, oil and gas companies scheduled to report earnings this week include: Devon Energy (DVN), Diamondback Energy (FANG), Marathon Petroleum (MRO), Marathon Petroleum (MPC), Occidental Petroleum (OXY) and ONEOK (OKE).

Meanwhile, hedge funds are broadly bearish on commodity futures for the first time since 2016, a sign of growing pessimism about demand for raw materials amid worries about an economic slowdown. Bloomberg reported.

Fund managers held a net position of nearly 58,600 contracts in the week ended July 30, betting on falling prices for a basket of 20 raw materials, according to U.S. Commodity Futures Trading Commission data compiled by Bloomberg. Investors have been making net bullish bets on prices for more than eight years, including during the peak of the pandemic, the report said.

Turn to metals, safe-haven gold (HAUUSD:CUR) fell 0.7% after initially rising, posting weekly gains on Friday. Gold is often considered a safe bet during times of geopolitical turmoil, economic uncertainty or financial market instability. The non-yielding metal has gained 18% this year and is expected to be supported by a long-awaited U.S. interest rate cut and the renewed appeal of Western investors for the remainder of the year.

Base metals also posted losses amid demand uncertainty and weak equity markets. Copper prices have fallen sharply from May’s record highs as China’s inventory builds.

Elsewhere, among agricultural commodities, cocoa and wheat futures followed the broader market lower, while soybeans held steady.

Overview of recent commodity price trends and some ETFs