Brent crude posted solid gains on Thursday and returned back above 111 USD per barrel. Regarding news, Iran’s Foreign Minister Salehi warned his country’s neighbors not to “let themselves to be dragged into a dangerous position”. His words should have probably threaten the U.S. gulf allies in general and Saudi Arabia in particular as Saudi’s Oil Minister Naimi said earlier this month his country was able to boost output by about 1.5 to 2 million barrels per day almost immediately. Meanwhile in the U.S., Obama administration rejected, for the time being, the construction of Keystone XL pipeline which should have brought the Canadian crude from to U.S. Midwest. Moreover, the chief of another pipeline company, Enbridge, said that the rejection might pose some threat to other planned projects. Still, the part of the project which should bring crude from the U.S. Midwest (Cushing) to U.S. Gulf Coast should not be threatened. Let us remind that the lack of options to move crude from Cushing to Gulf Coast has been the main reason of disconnection of WTI price from other world benchmarks.
Base Metals
Base metals prices experienced yet another positive session on Thursday – both aluminium and copper gained more than 1 percent.
Nonetheless, today’s fresh release of China’s HSBC PMI drags prices of base metals down as it unveiled the third below-50-reading in a row. On the other hand, the figure suggests that Chinese manufacturers started 2012 in a sluggish mode, further spurring speculation that the Chinese government might ease policy.