Brent crude posted small gains in a thinner-than-usual US holiday trading. Stronger France’s rhetoric against Iran might have supported the price of oil. France’s Foreign Ministry spokesman said that the country considered a ban on import of oil from Iran.
On the other hand, lingering uncertainty surrounding the euro zone has counterweighted news on a prospective disruption of oil supplies. Moreover, relatively favourable conditions on the physical market are confirmed by the shape of forward curve, which is only in a modest backwardation compared, for example, to the end of September.
Base Metals
Weak China’s PMI released this week has added to an overall market gloom and together with the euro zone uncertainty have undermined the price of copper, which is set to post losses in a fourth consecutive week (see the chart). At the time of writing, the price of copper is hovering at 7150 USD per ton. Nevertheless, let us remind that current prices seem to be favourable from the perspective of at least some Chinese buyers as the imports of the metal reached the highest level since May 2010 in October. Therefore, such a behaviour might mitigate a sell-off of copper due to European debt issues. Still, risks for the price of copper remain skewed to the downside in sessions ahead.
Precious Metals
Despite strong risk aversion, gold continues to trade as a “normal” commodity in a sense that any gains of the US dollar lead to decrease in gold price. Moreover, the price of gold in Rupee remains close to its all-time highs which arguably discourages Indian consumers from buying.