Brent crude futures fell by almost $1 per barrel during Asian trading, giving up all of the gains seen during US trade as cracks quickly appeared in the Greek austerity package, concerns over the outlook for US oil demand and the first year on year decline in Chinese exports for two years.
As member EU states quickly poured doubt on the Greek rescue package, sentiment towards oil worsened following the publication of OPEC’s supply & demand forecast, reducing its estimate of crude consumption for 2012 by 120k barrels per day to 88.8 million barrels per day. China announced its trade figures for January showing a 0.5% drop in exports in the year to January. It should be noted that the Lunar New Year occurred much earlier this year and so one should be careful to read too much into it.
Cotton futures were broadly unchanged during the Asian session. But this marked a brief period of stability following the previous day where cotton prices fell by 4c per lb following publication of the latest monthly USDA cotton supply & demand report. Concerns over current cotton supplies given disruptions in Texas and Australia were lifted after the report increased its estimate of world cotton supplies by 0.5 million bales (citing better than expected yields in Pakistan), reduced its consumption estimate to leave a stocks/use ratio of 55%, well above historical norms.
The evidence from this week and the reaction in market supports the view in the latest Materials Risk cotton price forecast where we expected weak fundamentals to reassert themselves, see report here.
Also, click for the latest Friday links and the chart of the week.
Feb 10
COMMODITY MORNING CALL: CRUDE 117.77 -0.69%; COTTON 91.12 +0.82%
Brent crude futures fell by almost $1 per barrel during Asian trading, giving up all of the gains seen during US trade as cracks quickly appeared in the Greek austerity package, concerns over the outlook for US oil demand and the first year on year decline in Chinese exports for two years.
As member EU states quickly poured doubt on the Greek rescue package, sentiment towards oil worsened following the publication of OPEC’s supply & demand forecast, reducing its estimate of crude consumption for 2012 by 120k barrels per day to 88.8 million barrels per day. China announced its trade figures for January showing a 0.5% drop in exports in the year to January. It should be noted that the Lunar New Year occurred much earlier this year and so one should be careful to read too much into it.
Cotton futures were broadly unchanged during the Asian session. But this marked a brief period of stability following the previous day where cotton prices fell by 4c per lb following publication of the latest monthly USDA cotton supply & demand report. Concerns over current cotton supplies given disruptions in Texas and Australia were lifted after the report increased its estimate of world cotton supplies by 0.5 million bales (citing better than expected yields in Pakistan), reduced its consumption estimate to leave a stocks/use ratio of 55%, well above historical norms.
The evidence from this week and the reaction in market supports the view in the latest Materials Risk cotton price forecast where we expected weak fundamentals to reassert themselves, see report here.
Also, click for the latest Friday links and the chart of the week.