Oil prices remained firm in Asia Monday after the rebound by the end of last week. US economic indicators released last Friday showed signs of fatigue, suggesting the recent trend of strong data might have peaked. Meanwhile, as escalated tensions over Iran would continue to support oil prices, the outlook of global economic recovery is not without risks. While we have a light calendar on Monday, the focus this week is on speeches by the Feb Chairman Ben Bermanke who will give talks at a US university on Tuesday and Thursday before another two appearances at the school next week. The RBA and the BOE minutes for March meetings will be released on Tuesday and Wednesday respectively.
US industrial production stayed flat in February, following +0.4% and +0.9% gains in January and December, respectively. This was weaker than expected, although the flat reading was driven by upward revision in January. Manufacturing production rose a less than forecast +0.3% in February, but was also due to a large upward revision in January. Headline CPI climbed +0.4% m/m in February as driven by a +6.0% increase in gasoline prices. On annual basis, the reading gained another +2.9%. Core CPI, however, came in at +0.1% gain after a +0.2% increase in January. Currently, how things evolve depend of the outlook of oil prices, if surges in oil prices continue and the costs of input feed through to consumer prices and hurt household spending, the Fed may alter its more optimistic tone on the economic recovery and may consider another round of quantitative easing
Commitments of Traders:
With the exception of gasoline, speculators were bullish towards the energy complex in the week ended March 13. Net length for crude oil futures jumped +6 222 contracts to 243 174. Net length for heating oil rose +2 357 contracts to 31 968 while that for gasoline declined -3 042 contracts to 94 537. Net short for natural gas futures climbed +12 087 contracts to 137 969.
With exception of palladium, speculators were bearish on precious metals. Net length for gold futures slipped -12 359 contracts to 150 906 while that for silver dropped -1 376 contracts to 21 816. For PGMs, net length for platinum fell -773 contracts to 25 967 while that for palladium gained +1 152 contracts to 10 952.