On Monday, the oil price continued to drift lower and the front-month contract on Brent (ICE) settled at 117.38 USD per barrel (USD/bbl).
Yesterday, the ICE released its commitment of traders report; although the net speculative position in Brent futures slightly decreased, it remains just shy below its all-time high reached in the previous week. Share of money managers’ long position on open interest has also risen significantly in 2013 and is seen near its record high. Speculative demand (which probably partially stems from rebalancing of global commodities indices from WTI towards Brent) might have added an additional support for the oil price this year.
The overall situation in the oil market seems to be, according to EIA data, rather comfortable (the main bullish story, which is due to the level of stocks on both sides of the Atlantic probably a bit overdone, seems to be that of gasoline); in its latest report, the agency even estimated little increase in global crude oil inventories. We therefore expect the oil price to decline in weeks ahead.
On Monday, the gold price closed barely changed at 1610 USD per troy ounce (USD/toz). Last week, the price of gold saw the largest weekly drop since late June 2012; in its latest report, the World Gold Council said that demand for gold fell last year for the first time since 2009 due to decreasing investment and jewellery demand.