Commodity update 73
Brent Crude and WTI had a confident start into the week - The gold price remained at a three-month high at the beginnig of the week - The International Nickel Study Group (INSG) published new data for the nickel market
Oil
Brent Crude and WTI had a confident start into the week. Brent rose beyond USD 56 per barrel and WTI was traded for USD 54 per barrel. The accomplishment of OPEC’s reduction is still in progress. According to Reuters, Bloomberg and OPEC Secondary Sources the cut meanwhile amounts to 1.07 Mio. barrel per day which represents a completion rate of approximately 91 percent.
Following analysts of the Landesbank Baden-Württemberg, it might be a question of time until the pressure on less disciplined members will increase. Above all the Iraq had difficulties to comply with its agreed reduction of 200,000 barrel per day. The crucial factor determining the outcome of the reduction might be the growth rate of shale oil production in the USA. Even by introducing OPEC’s cut in production, a global excess supply still remains. With a production of 500,000 barrel per day, the US production grew similarly to the former boom years.
Gold
The gold price remained at a three-month high of USD 1,255. Against the background of an unpredictable development in the future US economic policies, a weak Euro and decreasing Chinese monetary reserves, investor may be aiming for safe havens. This process can be observed by Gold-ETF inflows of about 10 tons last week. .
However, the possibility of further rising US interest rates may mitigate this development. The Federal Reserve indicated that further raises could be announced in line with an expanding economy in the US. Nevertheless, references for a certain date are missing so far. According to Fed Fund Futures the current probability for a raise is estimated to 36 percent in March, 63 percent in May and to 77 percent in June.
Nickel
The International Nickel Study Group (INSG) published new data for the nickel market which revealed supply deficit of 46,700 tons. For the current year the INSG estimates a supply deficit of about 66,000 tons. Following to LBBW analysts these figures did not contain a possible easing of the export ban and the possible closing of several mines on the Philippines.