Despite touching a three-day high at 115.87 USD per barrel (USD/bbl) in intraday trading, the front-month contract on Brent (ICE) settled at 114.44 USD/bbl. Oil posted the most of losses later in the afternoon after the results of Italian election had come out. Oil price was under pressure even in the North Sea market; according to Reuters data, Forties differential to Dated Brent fell into a negative territory (for the first time in 2013) and hit the lowest level since the end of November 2012.
Regarding news, a new round of talks on Iranian nuclear program between Iran and world powers is being held today. Although the Iranian oil production fell considerably (by 650 thousand barrels per day, according to EIA data) in a response to sanctions imposed by western powers, high oil prices have somehow mitigated its adverse impact and the regime thus show almost no signs of backing down over its nuclear program. We therefore expect no major breakthrough from today’s discussion.
Gold price benefited from a new round of uncertainty stemming from the inconclusive result of Italian elections. Later in the afternoon, US treasuries yields fell considerably and thus supported the price of the yellow metal which is seen just shy below 1600 USD per troy ounce level at the time of writing of this report. Let us recall that the price of gold has been recently under pressure of relative positive news from the US economy and hawkish minutes from the last FOMC meeting.
An interesting piece of data was released by the US Commodity Futures Trading Commission (CFTC) on Friday. The CFTC data unveiled that the net speculative position in gold futures fell to the lowest level since November 2008. Quite interestingly, even major ETF’s have seen a net outflow of the metal this month – according to Reuters data, the outflow was the largest since January 2011.