KBC Market Research Desk
KBC Bank
Crude
The oil price somehow stabilized in recent days and the front-month contract on Brent has been trading in a relatively narrow range between 77 and 80 USD/bbl in the past seven sessions. Yesterday, January contract on Brent settled at 79.30 USD/bbl, i.e. about 1.6% higher than on Wednesday.
Apart from comments of Venezuela’s Foreign Minister who said that the country would be willing to take part in cutting OPEC production if the cartel agreed to do so next Thursday, much better than expected US figures supported the oil price. Namely, the Philly Fed indicator went through the roof (20.7 to 40.8 vs. 18.5 expected) and pushed the oil price towards 80 USD/bbl level. Still, comments of Venezuela’s Minister indicate that the upcoming OPEC meeting may easily become the event of this quarter, (not only) from the perspective of oil markets.
Base Metals
Yesterday, unexpectedly strong Philly Fed reading overshadowed weaker than expected flash estimate of China’s HSBC PMI for November. Although copper price fell by about 0.3%, base metals prices on average grew by 0.8%. Still, despite the three-month contract price decline, the spread between cash and three-month copper price is still seen close to a fivemonth high as stocks of the metal at LME remain low.
Nickel outperformed the most of its peers yesterday and is set to post the largest weekly gain since early May. Apart from reassurance of ban of ore exports from Indonesia, report of International Nickel Study Group saying that market surplus declined markedly vis-à-vis the year ago supports prices today.
Chart of the day:
Nickel is set to post the largest weekly gain since early May.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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