On Wednesday, Brent crude (ICE) posted significant losses and the price of the front-month contract dipped well below 110 USD per barrel (USD/bbl) level. Moreover, today’s China PMI data pointed out to further deterioration in sentiment and Brent is thus hovering at 108 USD/bbl level at the time of writing of this report.
Regarding the EIA Weekly petroleum status report, it showed an unexpected built in US crude oil inventories which overshadowed a drop in product stocks and the overall message of the report was therefore rather bearish. However, the impact on trading was rather small.
Base Metals
Today in early trading, base metals prices further retreat from multi-month highs hit in previous sessions as HSBC flash manufacturing PMI for China remained well below the key 50 points level. The Chinese manufacturing sector has thus contracted for an 11th consecutive month in September. Moreover, while the overall euro zone PMI figure slightly exceeded expectations, France PMI shrunk to the lowest level since April 2009 and put additional pressure on prices of risky assets.
However, in spite of weak PMI, LME copper is still trading well above 8000 USD per ton.