COPPER & CRUDE OIL DRIVERS FOR APRIL,5

IF high unemployment levels alongside weak HSBC PMI of the Euro-zone and the feeble UK HSBC PMI data was not enough to slide down the prices of commodities, then lower than expected US non-farm payroll data did impede on their prices.

Earlier this month Copper and Crude has already faced the adversary of low HSBC PMI data of UK and the entire Euro-zone, further the unemployment levels of the Euro-zone for February came out to be as high as 12%. The increase in the US jobless claims of 28,000 was also disheartening to the traders and investors.

The US Non-farm payroll data for March edged up 88,000 against the expected figure of 193,000. The unemployment however did improve slightly from 7.7% in Feb to 7.6% in March. The weak data was enough to pull down the prices of the red metal and crude.

Copper on the MCX for its April end contract closed at Rs.406.25, a change of -0.68 percent from its previous closing price of Rs. 409.05. Copper made a high of Rs. 409.75 and a low of Rs.405.3 whereas its Open Interest stood at 34783(lots). For its June delivery Copper closed at Rs.412.9 from its PCP of Rs. 415.55- a decrease of 0.67 percent. The June contract made high of Rs. 416.15 and a low of Rs.412.20 with an OI of 4885 (lots).  

Copper inventories at the LME rose by 6850 tons to 579175 tons.  At the COMEX Copper for its May13 contract closed at 334.40 USD/lb with a change of -0.22%.  

Crude Oil for its April contract closed at Rs. 5087 with a change of -0.14% from its previous closing price of Rs.5094. It made a high of Rs. 5130 and a low of Rs.5056 with an OI of 22318 (lots). At the NYMEX Crude Oil (WTI) was priced at 92.70 USD/bbl with a percentage change of -0.60% for its May 13 contract. For the same May 13 contract Crude Oil (Brent) was priced at 104.12 USD/bbl with a change of -2.09%.  

The drop in the prices of Crude was capped by a weakening Dollar; determined by the speculation that the Fed Reserve would continue with quantitative easing. The US Dollar Index dropped to 82.57, a change of -0.18%. The Dollar fell to $1.304 per dollar, its lowest level since March, 25. US Crude inventory was at 388.6 million barrels with an increase of 2.71 million barrels by the last week of March. The US crude stockpiles were at its highest level since 1990.  

Copper and Crude

Copper on the MCX for its April end contract closed at Rs 409.0/kg with a change of 1.41% from its previous closing price of Rs 403.35/kg after registering a high of Rs 410.95/kg and a low of Rs 401.45/kg. Its open interest stood at 32246. For its June contract Copper closed at Rs 415.55/kg from its previous closing price of Rs 410.05/kg, it made a high of Rs 417.20/kg and a low of Rs. 408.20/kg with an open interest of 4759 lots. At the COMEX Copper closed at 335.50 USD/lb, marking an increase of 0.03% for it May13 contract.

The increase in Copper prices was a resultant of strong demand from China. China’s official PMI data for its non manufacturing sector was marked at 55.6 in March from 54.5 of February.  The increase in the figure was due to the buoyancy in the construction sector marking well for the modest recovery in the world’s second largest economy and the largest consumer of copper. Chinese GDP is expected to increase by year on year 8.1% in Q1, faster than its 13 year low rate of 7.8% in 2012. Meanwhile the consumer inflation for China is expected to drop down at 2.4% from its previous 3.2 percent.

Crude oil at the MCX closed at Rs 5094 from its previous closing price of Rs 5199 sliding by 1.71%.  Its open interest stood at 24049. Crude oil prices at the MYMEX dropped by 2.31% to trade at 92.27 barrel. The prices dropped on the wake of high jobless claims in the US, the latest official data revealed that a greater number of individuals claimed to be jobless in the last week than expected. The jobless claims increased by 28,000 to 385,000 contrary to the expectation of drop of 7,000 claims.

The crude inventories increased by 2.71 million barrels in the last week of March above the market expectation of 2.2 million barrels. The total crude inventories stood at 388.6 million barrels in the last week.

Crude prices are expected to be bearish. US inventories have climbed to a 22 year high and amidst economic concerns and high jobless data the prices of crude is set to be in the red. However the US nonfarm payroll data will be in focus to trade for the day.