On Friday, Brent crude (ICE) fell by about 2.5 percent and thus returned back below 100 USD per barrel (USD/bbl) level. At the same time, however, ongoing Norwegian strike continued to support the time structure and the front-end of the curve thus remained in backwardation. Moreover, Platts reported that the loading program for August for Brent, Forties and Ekofisk suggests that oil output from these fields (part of the BFOE, or Brent, benchmark) will be the lowest on record. This might prevent the short-end of the curve to slip into contango in weeks ahead.
Despite the fact that the People’s Bank of China unexpectedly lowered the interest rate on Thursday, base metals prices were falling on Friday as the US labor market data surprised on the downside of expectations.
Today in early morning, China’s statistical office released the figures on inflation for June. Headline CPI inflation came out a touch below consensus and thus indicated that further monetary easing might be ahead. However, copper failed to take advantage of the data and at the time of writing is seen at 7520 USD per ton (3M LME).
The price of gold fell sharply on Friday as weaker than expected US payrolls report and slightly disappointing outcome of the ECB meeting bolstered the US dollar. The US labour market report came out on the weaker side of expectations. Although the details were not that bad, the price of gold fell below 1600 USD/toz.