Brent outperformed the most of the commodities complex on Monday as the price of the front-month futures contract (ICE) edged a touch higher and settled at 101.16 USD per barrel (USD/bbl).
Nonetheless, the oil price has recently been under pressure of rising core market bond yields as the fundamental picture of the oil market remains bearish – the supply growth remains robust and thus outstrips the demand growth. On the other hand, rising NWE refinery margins has provided some support for demand for physical oil (light grades in particular) and the front-end of Brent forward curve thus remains in mild backwardation.
Base metals prices extended previous losses on Monday. Copper underperformed its peers and the three-month futures contract (LME) lost about 2.2 percent. Apart from rising US yields and news about liquidity problems of some Chinese banks (potentially negative for GDP growth), news that workers at Indonesian Grasberg copper mine resumed operations weighed on the price of copper (let us recall that initial reports suggested the mine may have been closed even for three months).
Despite recent losses, the copper price still remains above a support at 6633 USD/t (a 2-3/4 year low). Technically, if the resistance is breached, the metal will open the room for further fall to 6000 USD/t.