Although the price of the front month contract on Brent dipped below 122 USD per barrel (USD/bbl) level in the first half of yesterday’s session, it closed above 125 USD/bbl.
In the afternoon, the price of oil surged after the release of US ISM manufacturing index. It came slightly above expectation and fuelled rally in oil price – within about four hours, the front month contract surged by more than 3 USD/bbl. The reaction was, in our view, surprisingly strong and rather exaggerated. We still believe that risks for the price are skewed to the downside.
Copper outperformed the rest of the base metals complex on Monday. Quite surprisingly, the gains were not driven by a better than expected China’s PMI for March, but rather by the rising risk appetite after the release of better than expected US ISM manufacturing index.
Meanwhile, the three month contract on aluminium posted only small gains yesterday. Whereas copper is trading close to twomonth high, aluminium is seen even below 2150 USD per ton, i.e. the lowest level since mid January.