On Thursday, the oil price rose sharply on comments of Janet Yellen (likely to be the next Fed chief) before the US Senate Banking Committee and the December’s futures contract (ICE) expired while trading just shy below 109 USD per barrel (USD/bbl). Yellen defended Fed’s steps and said easy policy should continue until Fed’s policy officials are certain the recovery is strong enough.
In the meantime, while the unrest in Libya has continued, Iraqi government made steps to restore calm at Rumaila oil field that is located in the south of the country where protests broke out earlier this week due to alleged insult of worker’s religion. Rumaila oil field accounts for more than third of the country’s oil output. The new front-month contract (January) is trading at 108.4 USD/bbl at the time of writing of this note.
Base Metals
Copper is set to post the largest weekly loss since early June this week. The price of the three-month contract (LME) breached support at 7000 USD per ton (USD/t) and the next target is seen at 6933 USD/t. Meanwhile, the aluminium price (3M LME) extended previous losses yesterday and is therefore set to post loss in the third consecutive week. The price breached below support at 1800 USD/t and the next support is seen at 1775 USD/t. Unlike crude and gold, comments of Janet Yellen provided only limited support to base metals yesterday.