By Leon Westgate
Although several of the base metals have managed to break out of recent trading ranges, crude oil remains stuck in a rut. Front month WTI seems to get a nosebleed every time it approaches $83/bbl with the contract lacking that little extra something needed to jolt it higher.
With the approach of month and quarter-end, and the Easter holidays, it seems likely that crude oil will continue to be range bound. The release of the US NFP data on Friday - a day most markets will be closed - presents a bit of a conundrum and will likely see the market take a bit of risk off the table. It also promises a potentially wild ride on Monday, when New York will be open but London and China will be on holiday, resulting in very thin conditions.
Several bullish factors are affecting the coal market now. On the demand-side, the drought in southwestern China has affected hydroelectric power generation and should boost demand for coal-fired power generation.
Trade commodities or equities from across the globe. Join Now
This should lend support to thermal coal prices. On the supply side the queue length at Newcastle is creeping up while cyclones have disrupted the ports at Hay Point and neighboring Dalrymple Bay in Queensland, albeit mainly conduits for metallurgical coal.
Prices for both API2 and API4 have firmed up a little, though their performance has been solid rather than spectacular. API2 for Q2-10 gained $0.85 to $73.85/mt while API4 for the same delivery posted a $1.35 gain to $82.60/mt.
