The price of Brent oil rose slightly from the level of two weeks ago, mostly remaining above US$107 per barrel throughout the period. Oil prices were kept higher, in particular, by the persisting unrest in Egypt and the influx of further good macroeconomic figures from the United States. This also had a partial impact on probably the most interesting event of the last two weeks, i.e., a significant increase in the price of U.S. WTI oil. Compared to late 2012, this WTI is trading almost 17% higher, while the price of Brent oil fell by almost 2.5% over the same period. The spread between Brent and WTI, which has historically been at slightly negative levels on average (that is, Brent used to be slightly cheaper than WTI), declined towards zero later last week, thus hitting three-year lows. However, the main reason for the decline was the gradual construction of the infrastructure to facilitate oil transport within the U.S., which was complemented by the increased transport by road and rail or, where appropriate, on rivers. As concerns Brent, its price was encouraged not only by the above-mentioned unrest in Egypt, but also by the bad news from the North Sea physical oil market, which has been struggling with production interruptions ahead of the seasonally, typically lower oil extraction in August. Thus the spread between the prices of front and second-month futures contracts (ICE) is still seen at elevated levels.
Prices of base metals were up by 2.7% on average in the last two weeks, but the developments in the individual metals were highly diverse. Prices of aluminium as well as copper rose above average – the three-month contract for copper (LME) went up by more than 4% and even approached US$7,000/t. As regards news on fundamentals, the release of data on the Chinese GDP and industrial output for June did not surprise the market to any great extent, as the figures were only slightly below the consensus. By contrast, the release of the quarterly report on copper mining by Rio Tinto, one of the leading producers, confirmed that the situation in the copper market is likely improving now, after years of deficits