On Friday, Brent crude was trading in a relatively narrow range between 97 – 98 USD per barrel (USD/bbl), eyeing results of the parliamentary election in Greece. The Greek election results make a near-term exit of Greece unlikely, but the longer term outlook regarding euro participation is still uncertain. Also for Spain and Italy, the Greek election results are no game changer. The initial reaction to the election result was, nonetheless, positive and Brent opened above 98 USD/bbl. However, markets will be cautious. The formation of the government and the negotiations with the Troika keep uncertainty high.
Meanwhile, the CFTC said on Friday that speculators cut the net long position in WTI (futures only) to the lowest level since the end of September 2010 (see the chart). Quite interestingly, the number is driven rather by cuts in long positions (which are the lowest since August 2010) rather that built in short positions. Later this week, the FOMC meeting will be watched closely. Even if the committee signals further easing of monetary conditions, we do not expect an overly optimistic reaction of the price of oil. We stick to our estimate of 100 USD per barrel as an average for Q3/2012.
LME copper rose by more than 1 percent on Friday and hence posted the first weekly gains since the end of April. Today, the three month contract on the metal extends previous gains and in early trading even hit three-week high above 7600 USD per ton (USD/t).