Yesterday in the late afternoon, the front-month contract on Brent gained almost 2 percent and eventually settled at 107.73 USD per barrel (USD/bbl) level whereas the US light sweet oil gained just about one percent. Surge in Brent price might have been supported by the announcement of maintenance at Whiting refinery in Indiana which is expected to raise stocks of oil at Cushing. Hence, such news might have prompted some traders to bet on widening of the Brent – WTI spread.
Regarding the Commitment of Traders report released by the ICE, it showed stagnation in money managers’ position in Brent futures. Recall that this is in contrast with the development in net speculators’ positions in WTI which fell to the lowest level in more than two years. In addition to the refinery maintenance, the divergence between the speculators’ bets on the two oils indicates that the spread between them is not likely to tighten anytime soon.
The average base metals price barely changed on Monday. While the price of copper bounced from 7600 USD per ton (USD/t) level, the price of the three-month aluminium (LME) fell by about one percent.
Quite interestingly, although the Shanghai copper futures curve continues to indicate that the physical market remains rather comfortable, the spread between 3M contracts at LME and Shanghai, which was more or less positive between January and mid October this year, has been hovering around zero in past three weeks.