Crude
On Tuesday, crude posted modest losses. The price was dragged down mainly by disappointing U.S. industrial and housing data.
After a severe correction two weeks ago, crude market is still seeking a new direction. On the one hand, lingering tensions in the Middle East/Libya poses some (upside) risk for the complex. On the other hand, investors are still worried about the impact of high oil prices on the global economic growth (the “demand destruction” story).
Regarding the latter mentioned, the American Petroleum Institute said yesterday that U.S. gasoline stocks dropped by about 0.7 million barrels last week instead of expected 0.8 million barrels build in inventories. Hence, this figure does not play in favor of the demand destruction. Nevertheless, more reliable monthly data on the oil and products demand from the U.S. Department of Energy (DOE) will be available on May 27th. Let us remind that the official weekly data on inventories from the DOE will be released today in the afternoon.
Base Metals
Strengthening U.S. dollar and worse than expected figures from the U.S. economy weighed on the prices of base metals yesterday. Today, copper confirms its strong correlation with U.S. dollar (see the chart) and currently is trading slightly above 9000 USD per ton.
Precious Metals
Today, gold rebounds after three consecutive sessions of drop in price and currently is trading in sight of 1500 USD per troy ounce level. Silver once again confirmed its high volatility and outperformed the rest of the base metals complex yesterday. In contrast to the whole April 2011, RSI indicates that the metal is rather oversold.
