Crude oil price rebounds to 78.3 after plummeting to as low as 76.71 last Friday. Storms have forced Petroleos Mexicanos to cut 90 wells at onshore fields in the western states of Veracruz and Tabasco. At the same time, news that Hurricane Ida has entered the southern Gulf also boosted oil price.
In late October, Saudi Aramco, the state-owned company in Saudi Arabia, announced it would price it oil using ASCI instead of WTI starting from 2010. CEO Khalid Al-Falih said over the weekend that 'WTI has really become disconnected with the market where we sell and what we sell- we sell sour crude, heavier sour crude in the US Gulf coast, that is where most of our barrels in North America gold'. There have been speculations that more oil companies will follow the switch later.
Stock market also advanced as G-20 leaders decided to maintain stimulus efforts until economic recovery sustained. The MSCI Asia Pacific Index gained +0.5%. We have a light economic calendar Monday. In European session, the Eurozone's Sentix Investor Confidence probably improved to -12 in November from -12.6 a month ago. In Germany, industrial production is expected to have to risen +1% mom in September following an increase of +1.7% in the prior month.
Gold price extends strength and surges above 1100 as G-20 leaders ignored decline in USD. The dollar drops against major currencies in Asia Monday. Against the euro and pound, USD drops to 1.492 and 1.6712 respectively. Against Australian dollar, USD falls for the 4th consecutive day and once again approaches 15-month high made in October.
Commitments of Traders
- Crude Oil: Although net speculative long positions plunged almost -3K contract last week, it continued to stay at record level. We anticipate further decline in net longs in coming weeks as crude oil price has probably formed a temporary top at 82
- Natural Gas: Net shorts increased for the 4th consecutive week to -157.7K contracts. Increase in gas supplies together with warm-than-expected temperature in the US continued to weigh on price
- Gold: Net speculative long positions dropped for s 3rd week to 241.3K contracts last week. However, as gold price has resumed recent uptrend amid increasing risk aversion and IMF's gold sales to India's central bank, new longs should advance in coming weeks
- Silver: Net speculative long positions fell to 398K contracts. Similar to gold, strong rebound in silver price should boost new longs again
- Platinum: Net long positions fell modestly to 19.3K contracts. Despite this, net long positions continued to stay at record high level