Crude

Commodities saw a generally calm session on Monday, mainly thanks to crude. The oil price was seen in a relatively narrow range between 58 and 59 USD/bbl in the most of the session.

Market paid almost no attention to another set of bullish news from the US Energy Information Agency (EIA), which said it expected a slight decline in shale oil production in May (by 45 kbpd) mainly thanks to a decline in Bakken and Eagle Ford regions.

On the other hand, EIA’s data are based on a broad set of assumptions (for example regarding the future evolution of rig count and - most importantly - on production from new wells). Jury is thus still out on eventual impact on lower prices on US crude production. Let us also recall that weekly US crude stock data have surprised constantly positively to the upside as far as week-on-week changes are concerned. We therefore maintain our call for decline in oil prices in the short-term.

From this point of view, interesting news may come as soon as today in the afternoon because the IMF will release its WEO report (at 9:00 EST). Quite naturally, the report will also be interesting from the point of view of other commodities, too. The particular focus will be on estimate of China’s economic growth (which is likely to be revised to the downside).


Chart of the day:

Copper

Today in early trading, copper extends yesterday’s loss ahead of the release of China’s GDP growth figures that are due to tomorrow.

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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