On Thursday, the March contract on Brent (ICE) gained more than 1.2 percent and settled at 111.10 USD per barrel. The oil price was particularly supported after the release of US jobless claims report which reached their lowest level since early 2008.
Regarding news, the International Energy Agency released its Oil Market Report today. The agency revised its estimate for 2013 oil demand growth to the upside by 240 thousand barrels per day (bpd) to 90.8 million bpd due to the higher expected increase in Chinese demand. As concerns supply, the IEA said the OPEC production fell to 30.65 million bpd in December due to lower Saudi and Iraqi production. However, the agency forecasts that the call on OPEC crude will be 30 million bpd, i.e. below the cartel’s current output which supports our expectations of rather comfortable supply-demand conditions in months to come.
Base Metals
The price of copper gained nearly 1.5 percent yesterday and thus settled back above 8000 USD per ton (USD/t) level. As in case of oil, base metals prices were boosted by unexpected drop in US initial claims.
Today in early trading, base metals extend previous gains on better than expected China’s data. China’s economy expanded 7.8% Y/Y last year, slightly more than expected as the economy regained some speed in the final quarter. Evidence of a recovery in exports and slightly stronger than expected industrial output and retail sales suggest that the rebound will filter through into this year. At the time of writing of this note, three-month copper is trading at 8060 USD/t while aluminium is seen at 2060 USD/t.