Crude price extended Monday’s gains on Tuesday and both Brent and WTI edged higher.
Despite the fact that US consumer confidence surprised on the upside and that Libya’s oil returns to the market at faster than expected pace, a negative supply-side-news probably drove the move as Iranian protesters attacked British embassy in Teheran due to newly imposed sanctions on the country related to the IEAA report on Iran’s nuclear program. Let us remind that Iran is the second largest OPEC producer with output of about 3.5 million barrels of oil per day, i.e. about twice as high as Libya in the pre-war period.
Nevertheless, we believe that Brent price above 110 USD per barrel (USD/bbl) is not sustainable due to the euro zone lingering debt woes. At the time of writing, Brent is trading slightly below 110 USD/bbl (see the chart). Today, EIA’s figures on the US supplies will be released.
Copper price posts some losses after two rather positive sessions as slightly stronger dollar weighs on the price. Moreover, workers at Collahuasi mine (the world’s second largest mine) ended their two days strike which also mitigates the risk of further output outages.