On Monday, the price of the front-month contract on Brent surged by more than two percent and oil thus outperformed the rest of commodities complex. However, today in early trading, Brent gave up previous gains as Norwegian government stepped in and ordered oil workers to resume production. Therefore, the price of the front-month contract fell back below 100 USD per barrel and the spread between front and second month contract slightly eased.
Regarding today’s data, China’s imports for June fell short of expectations. Moreover, despite rising by 10.3 percent Y/Y, crude imports fell in June to the lowest level so far this year.
Base metals posted relatively strong gains on Monday. LME copper edged above 7550 USD per ton (USD/t) while aluminium price settled above 1900 USD/t level.
Alcoa’s CEO said yesterday he was sure that the market worked well and that current drop in prices was fuelled by overall situation in the global economy rather than market fundamentals. He noted that the demand growth remained vital which, together with cuts in production, pushed the market into deficit. This was confirmed by the International Aluminium Institute. In May, total stocks of the metal fell below 7000 thousand tonnes for the first time since December last year.