The price of Brent oil is set to decline in eleventh out of thirteen last sessions as the front-month contract (ICE) price dips below 110 USD/bbl level today in early trading. More or less the same factors which weighed on the oil price over the past few days are in play today as well, that is, a relatively stable situation in Iraq along with good news from Libya. As for the latter, Libya’s Oil Ministry said it has 7.5 million barrels of oil ready to be exported from reacquired ports of Ras Lanuf and Es Sider (which have a capacity of more than 500 thousand barrels per day).
In the meantime, however, the country’s oil production rose slightly to “only” 326 thousand barrels per day, according to a spokesman of the National Oil Corp, as oil from the western El Sharara oilfield remains blocked by separate protests. Although the oil production, which is still well below its historical standards, clearly limits room for increased exports from the country in the weeks to come, even a modest increase in volume of oil shipments from Libya could weigh further on North Sea oil prices. Situation in the physical market seems already to be very comfortable at the moment as prices of CFD contracts (short-term Dated Brent swaps) are seen at the lowest level in two years.
Base metals were trading mixed and on average posted only small gains on Monday. Copper price still remains in sight of multi-month highs, despite news about possible agreement between Freeport McMoRan and Indonesia’s government that could resolve a dispute about tax on exports of copper concentrates from the country. The tax levied on mineral ore exports early this year certainly contributed to an upward pressure on copper prices in recent months as it halted exports of copper concentrates from the country. Let us recall that Indonesia’s Grasberg mine is - with last year’s production of about 420 thousand tonnes of the metal, or nearly 3 % of global mine production - one of the world’s largest copper mines.
Chart of the day:
Money managers demand for COMEX gold futures surged last week…