Commodities

April 29 2013 8:25 AM

As discussed in the newsletter two weeks ago I suggested that the oil complex was in the early stages of forming a technical bottom pattern. I also said this was the second try at forming a bottom in the month of April with the first attempt in the beginning of the month. The first try failed but so far the second attempt has been successful pushing all of the commodities in the complex into a new higher trading range or the range that was in play during the first half of April. At the moment the complex is still in a recovery trend that has been driven more by short covering rather than by a surge of new longs moving back into the market. From a technical perspective the market is still trading in the higher trading range but it is starting to look like the upside momentum may be starting to lessen over the last two trading sessions.

April 29 2013 8:11 AM

After falling more than six percent in April, Brent crude oil sagged on Monday and lost some ground as it slipped below $103 on worries about the global economic outlook. The commodity fell to $102.64 at 6:06 GMT on Monday morning following last week's impressive gains. China will have a large influence on Brent prices this week as new manufacturing data for April will be released. According to Reuters, the oil consuming giant's manufacturing sector is expected to show improvement from March's figures. However, the HSBC purchasing managers' survey painted a bleak picture for the nation, and caused many to rethink their predictions for a Chinese recovery. The data showed that the Chinese industrial sector shrank and new exports decreased.

April 25 2013 8:22 AM

Heading into this morning's EIA weekly Nat Gas report the futures market is hovering around the trading range lower support level and barely remaining above it. In yesterday's newsletter I indicated that the market was setting up for a test of the range support level of $4.16/mmbtu and so far in light overnight trading the first pass at that test has already occurred with prices holding support so far. However, there is a lot of trading time left to the day with Europe trading just getting underway and the US yet to get started. In addition today the EIA inventory report will likely play a role in whether or not the range support is still in play or not by the end of the US trading session.

April 24 2013 9:12 AM

Firming equity markets in the US were enough to bolster oil prices after their negative start on Tuesday reversing the selling from the decline in China's PMI data. The oil complex has been under pressure for the last several weeks as the market focuses on a weakening oil demand scenario on the back of a slowing global economy. Most of the macroeconomic data hitting the media airwaves over the last several weeks has been suggesting that economies in both the developed and emerging market world may be heading for a period of slowing… even the main economic and oil demand growth engine of the world China.

April 24 2013 9:02 AM

Brent crude oil traded above the $100 mark on Wednesday morning on speculation that OPEC would make the necessary adjustments to increase the commodity's price if it remained below $100. Brent traded at $100.85 at 9:10 GMT on Wednesday morning. After keeping oil output constant at December's meeting, some OPEC members have called for an emergency meeting to tighten up supply. The organization, which supplies more than one third of the world's oil, is set to meet on May 31st for a regularly scheduled meeting.

April 23 2013 8:31 AM

For the third trading session in a row the spot Nymex Nat Gas contract failed to breach the $4.40/mmbtu resistance level after trading up to this level each day. In addition not only did the market fail to move through the $4.40/mmbtu level when it did fail it reversed and turned lower for the day. The market has been drifting lower in overnight trading so far suggesting that the market may now be setting up for a test of the lower range support level of $4.16/mmbtu.

April 23 2013 8:21 AM

After briefly reaching above the $100 mark on Monday morning for the first time in five sessions, Brent crude oil dipped again on Tuesday following disappointing Purchasing Managers data from China which confirmed worries about future supply growth. The commodity traded at 99.75 at 5:35 GMT on Tuesday morning. Brent's sagging price has caused problems for some of OPEC's members whose budget breakeven point is $100 per barrel. The organization has a scheduled meeting for May 31, at which some are expecting talk of tightening up supply to keep prices above $100.

April 22 2013 8:34 AM

Oil and most risk asset markets struggled last week as the markets were mostly driven by a risk off trading pattern. As discussed in more detail below most of the risk asset markets monitored in the newsletter were lower for the week. Oil has been under pressure from all three major fronts… fundamentals, technicals and global economic outlook. On the fundamental front the markets have been hit with mostly bearish snapshots for the last two weeks.

April 19 2013 8:55 AM

After falling from $106 per barrel in just under a week, Brent crude oil made a modest comeback on Friday morning. The commodity traded at 99.58 as it made its way toward the $100 mark at 9:40 GMT on Friday. According to CNBC, the recovery is shaky as many analysts believe the market is simply stabilizing after the massive sell off. Though bargain hunters have been buying the commodity on hopes of improvement in the weeks to come, data from around the globe supports concern about the commodity's demand growth in the future.