Despite touching the highest level since mid August, the price of the front-month contract on Brent (ICE) fell on Tuesday after the release of US ISM manufacturing figures. The report came out weaker than expected as the headline index dropped from 49.8 to 49.6, while a slight rebound to 50 was expected. The deviation from consensus was small, but the report didn’t bring any objection for the Fed not to proceed with further policy stimulation in the near future. With regard to QE3, the next interesting release will be US payrolls report for August scheduled for Friday.
Today, traders might focus on the EIA’s data on US oil inventories. Market expects a significant drop in stocks of both crude oil and products due to the impact of Hurricane Isaac. Recall that oil companies operating in Gulf of Mexico shut more than 90 percent of oil platforms during the storm.
Aluminium outperformed the rest of the base metals complex and the price of the three-month contract (LME) hit the highest level since early July.
Nevertheless, the situation in the market remains, as for supply-demand balance, comfortable. LME stocks are seen well above the medium-term average and year-on-year change in production was positive in the most of t his year.