Metals and Energy Commodities Respond Mixed After Fed’s & Data

Chicago (Oct 31)  The commodity markets seem to be making sense once again, crude oil has declined to 96.54 a good range based on supply and demand and the easing of geopolitical tensions. Natural gas is at 3.641 a bit high as it should find a bottom to sit between seasons but we will see what will happen after the EIA releases this weeks inventory report later today. Gold continues to make big moves up and down but keeps ending at the same place, trading at 1338.90 down a bit over $10 in the Asian session. Whiles is cousin silver dropped 565 points to 22.418 taking a very hard fall after a major climb on hopes of increased demands for industrial metals. Copper on the other hand seems to be trading in its longer term range at 3.306 after falling to 3.26 last week and recovering above the 3.32 price yesterday on lower inventories. Copper hit a 1-week high as the Federal Reserves decision to retain its stimulus efforts for the U.S. economy pushed several commodities higher.

Overall US data has been weak reducing demand for most of these commodities as the Fed sees an ongoing slow and sluggish moderate recovery. The Fed met expectations by leaving its stimulus program unchanged at its policy meeting, though it did surprise with its upbeat assessment of the economy. Some investors were looking for the central bank to downgrade its economic outlook after the government shutdown and budget impasse earlier this month.

Yesterday the Energy Administration released its week crude oil report which showed that crude supplies rose 4.1 million barrels for the week ended Oct. 25. Analysts polled by Platts were looking for a climb of 3.5 million barrels but the American Petroleum Institute had reported late Tuesday a much bigger 5.9 million-barrel climb. Gasoline supplies fell by 1.7 million barrels, while distillate stockpiles shed 3.1 million barrels, the EIA said. Gasoline stockpiles were expected to rise 1.5 million barrels, while forecasts called for a decline of 1.2 million barrels for distillates.

Copper rallied in European trading on bets the Fed will stay its course on the U.S. stimulus. The metal closed the New York session up too and remained positive in post-settlement trade after the Fed affirmed at the end of a 2-day policy meeting that there will be no slowdown in its bond-buying. Benchmark copper on the London Metal Exchange ended up more than 1 percent at $7,298 a ton, versus Tuesday’s close of $7,200, but down from a one-week high of $7,299.50 hit earlier in the session. Silver, used heavily in industrial applications despite being grouped in precious metals alongside gold, was the CRB’s biggest gainer of the day, rising more than 2 percent.

Platinum eased to 1465.10 following precious metals down while palladium gave up $1.80 to trade at 744.50. Brent oil eased by 35 cents to trade at 109.60 with the spread widening to over $13.00