KUALA LUMPUR: Commodity prices generally traded lower in recent weeks with energy largely underperformed while gains from gold and base metals eased, OCBC said.
The Singapore bank said easing geopolitical tensions and softer macro sentiment had dented oil prices, but robust demand for natural gas had kept natural gas prices elevated.
Meanwhile, gains from metals and minerals eased.
"Three of seven commodities in this category traded higher but is expected to face downward pressure due to China's lukewarm economic recovery," OCBC said in a report today.
It said gold prices traded a touch softer on news that China reported no change to its gold holdings in May.
The reduction in the number of global interest rate cuts for 2024 also somewhat weighed on sentiments of precious metals including gold and silver.
In the agriculture sector, prices were mixed with rubber, coffee and wheat outperforming, while cocoa prices weakened further but were still more than three times higher than pre-pandemic levels.
Crude palm oil (CPO) prices saw a slight rebound in the past month but continued to trade below April peak of undet RM4,500 per tonne on improving supply outlook as the El Nino related disruptions fade.
OCBC kept its forecast for WTI and Brent oil prices to average US$80§per barrel and US$86 per barrel in the second half of 2024 versus US$78.7 per barrel and US$83.3 per barrel in year-to-June 21 respectively.
"While we continue to hold the view that CPO prices will moderate in 2H24, recent trends suggest that the downward price movements may be more gradual.
"Consequently, we have revised our full-year 2024 price forecast upwards by RM300 to RM3,950 per tonne translating to a 3.6 per cent year-on-year increase from the 2023 average price."
This price revision primarily reflects the elevated CPO prices in 1H24 due to supply disruptions caused by El Nino, it added.
However, as the El Nino phenomenon has faded in May, OCBC expects further price moderation in the coming months.