LONDON (Commodity Online): Equity market gains this morning, with the Shanghai Composite rising 1.17%, have propelled crude oil prices. Despite the Japan’s September consumer confidence rising less than expected, at 40.7 against consensus at 41.3, front-month WTI crude broke above the $75/bbl resistance level — climbing to $75.18/bbl ahead of London trade.
Also supporting crude oil sentiment this morning, following an upward revision to the EIA’s global crude oil demand forecast last week Friday, OPEC also increased its 2010 global demand outlook. The cartel’s 2010 global crude oil demand forecast is now at 84.93mbpd — 370,000 barrels more than the previous forecast. However, OPEC maintained its outlook for a 1.4mbpd contraction in global crude oil demand this year.
With the greenback sliding in overnight trade, from $1.4839 to $1.4900 against the euro. Of note, the 5-day rolling correlation between front-month WTI crude and the trade-weighted US dollar has climbed from -62%, on Friday, to -74% this morning.
We have seen signs of weaker crude oil demand from China, the second-largest crude oil consumer, after customs data showed a 6% m/m contraction in crude oil imports, to 4.01mbpd in September. However, with China’s net crude oil imports up 8.2% YTD, the fall in crude oil consumption in September could have a muted impact on crude oil prices.
Thermal coal was a mixed bag yesterday despite a rise in India’s industrial production and higher crude oil prices as the Baltic Dry index contracted 1.85% — a warning of reduced global dry bulk trade activity. While API2(CIF ARA) for Q4:09 delivery clawed $0.10/mt higher to $74/mt, API4(FOB) for Q4:09 delivery shed $0.35/mt, to $66.05/mt.
With German base load power prices moving lower yesterday, carbon contracts also came under pressure. ICE EUA for December 2009 delivery contracted EUR0.11/mtCO2, to EUR14.22/mtCO2. UN-backed CER for December 2009 delivery was steady, at EUR13.25/mtCO2.
