On Thursday, commodities saw yet another calm session. Brent crude was hovering at 97 USD per barrel (USD/bbl) level in the most of the session eyeing the result of the OPEC meeting.
As expected, OPEC delegates decided to keep the production quotas unchanged. That is, the cartel should be officially pumping 30 million barrels per day (mbpd), i.e., some 1.6 mbpd less than it currently does. The market might have priced in such an option because the price of the front month contract on Brent opened by about 1 USD/bbl higher. Rumors about the possibility of coordinated action of major central banks to provide additional liquidity might also have helped to bolster the price of oil.
Regarding the OPEC, we maintain our view that the outcome of the meeting did not bring any major news. In our view, the most of the cartel members will produce as much oil as possible and Saudi Arabia will stick to its current role of the swing producer. After all, Saudi oil minister Naimi said earlier this week that the cartel might have to produce more than 30 mbpd to meet seasonally higher demand. Therefore, we would be cautious to say that the price of crude might rise, especially bearing in mind that the extreme level of uncertainty related to Greek election.
Base Metals
LME copper is set to post first weekly gains since the end of April this year. Today in early trading, the red metal extends gains from the end of previous session and is seen slightly below 7500 USD per ton (USD/t). Regarding the forward curve, although stocks of the metal at LME are seen well below mid term average, the curve signals that the market situation has calmed down significantly (in terms of supply-demand balance) as LME stocks have grown in past 30 days.