Crude oil, base metals to gain amid indications of softening in US-China trade tensions, expert says

Commodity Outlook: The improvement in US-China trade relations may bring a fresh impetus to industrial metals helping boost demand, Senior Technical Analyst Anuj Gupta said. He said that the investors can look for investment opportunities in base metals like zinc, nickel and copper

On MCX, Nickel, Copper, Aluminium and Zinc futures were trading in the green around 7 pm. Source: Reuters

Commodity Outlook: The improvement in US-China trade relations may bring a fresh impetus to industrial metals helping boost demand, Senior Technical Analyst Anuj Gupta said. He said that the investors can look for investment opportunities in base metals like zinc, nickel and copper.

On MCX, Nickel, Copper, Aluminium and Zinc futures were trading in the green around 7 pm.

Any favourable news on this cold act as a trigger for base metals and crude oil.

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Gupta who is a Deputy Vice President, Commodity and Currency Research at Angel Broking said that crude oil also has a good chance for growth. While the Brent Crude may test levels around USD 47-48 over the next two weeks, the US WTI could attain levels around USD 45-46, he said.

Oil was also boosted on Tuesday by US and Chinese officials reaffirming their commitment to a Phase 1 trade deal. Further support came from American Petroleum Institute figures showing U.S. crude stocks fell more than expected, Reuters reported.

A record oil output cut by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia has helped to lift Brent from April`s 21-year low below USD 16, it further said.

The price of industrial metals and oil may go up further because of the Hurricane Laura and Hurricane Katrina, Gupta said as the supply side activity is likely to take a major hit.

The US energy industry was preparing for a major hurricane strike, cutting crude production at a rate approaching the level of 2005`s Hurricane Katrina and halting oil refining at plants along the Texas-Louisiana coast, the Reuters report said.

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Officials in the two states ordered hundreds of thousands of coastal residents to flee inland as Hurricane Laura strengthened and forecasters predicted it would become a major hurricane with sustained, 115 mile per hour (185 kph) winds.

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