On Monday, commodity prices fell across the board. The front-month contract on Brent lost about 1.4 percent, mostly in a reaction to weaker than expected Germany’s Ifo index. Regarding yesterday’s ICE Commitment of Traders report, it pointed to a decline in money managers’ position in Brent futures (ICE) which is quite interesting as the report showed market break-up after QE III announcement. Recall that, according to CFTC, speculative positions in US light sweet oil (WTI) increased over the same period.
Today in early trading, Brent takes back yesterday’s losses as US Congress adopted new measures against Iran due to its controversial nuclear program. At the time of writing, Brent is seen at 110.15 USD/bbl level.
Although the price of oil fell by 0.5 percent on Monday, consumers in India and China showed some buying interest, Reuters said. India’s buying heightened after the announcement of QE III as Rupee strengthened against the US dollar and therefore pushed the price of gold (in terms of rupees) to about three weeks low.