On Friday, commodities prices fell across the board. The price of Brent crude (ICE) fell after the release of the latest Oil Market Report (IEA) and thus settled well below 115 USD per barrel level. Nevertheless, the timespreads remained firm – Reuters reported increased demand for North Sea oil. Some cargoes are expected to be exported to South Korea. As regards the CFTC Commitment of Traders report released on Friday, it unveiled further decline in Money Manager’s net position in WTI futures although the number of traders taking the long position in US oil slightly increased (see the chart).
Today, Brent erases early losses and the front-month contract (ICE) is trading at 114.50 USD per barrel.
Base metals complex underperformed the rest of commodities on Friday. Both copper and aluminium fell by more than one percent ahead of the release of China’s economic data. The data offered some positive signs for the economy. Exports grew at roughly twice the rate expected in September, while imports returned to the path of expansion - copper imports rose slightly last month while aluminium imports fell modestly. Moreover, Chinese inflation figures for September showed year-on-year inflation fell to 1.9 percent in September (in line with expectations) which might spur bets on further easing of monetary policy.
Regarding the week ahead, the eye-catcher is the release of figures on China’s GDP growth for the third quarter. The market expects further deceleration of growth to 7.4 percent Y/Y.
Chart of the day:
Number of traders (Money Managers) taking the long position in WTI futures vs. the price of the front-month contract on WTI.