Forex Journal

Crude

A positive global sentiment and a weaker US dollar underpinned rising crude prices on Friday. According to the Saudi Arabia’s oil minister Naimi, global oil demand should rise between 1.5 and 1.8 million barrels per day this year and Saudi spare capacity should decrease by 0.5 million bbl/day to 4 million bbl/day. Naimi also said he was worried about the pressure exerted by some market participants who are pushing the price of oil either up or down, away from the market fundamentals. Meanwhile, the latest CFTC Commitment of Traders (CTFC CoT) report showed that the stance of the speculative community towards crude oil remains bullish (see chart). 

Base Metals

Copper posted modest gains on Friday as worries concerning further tightening of China’s monetary conditions fade away and a supply outlook remained tight. Today, a 3 month contract on tin (LME) reaches all-time high at 27 800 USD per ton. According to Reuters, efforts to extend the mining operations at Australia’s Century zinc mine (the world’s second largest deposit) have so far failed. The mine should be closed in 2015. 

Precious Metals

Narrowing spreads in euro zone weighed on prices of precious metals on Friday. A view of the fading attractiveness of precious metals was also supported by the latest CTFC CoT report which unveiled a further drop in the net non commercial position in gold (which has been decreasing already for the third week in a row). The yellow metal already lost more than 5 percent in 2011.

KBC Bank
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