Crude Oil suffered sell of as Iraq supplies went undisrupted despite the violence while industrial metals outperformed on copper gaining 3% on month while precious metals held on to its gains.Ole S Hansen, Head of Commodity Strategy at Saxo Bank said that falling inventories and recovery signs in China economy contributed to the uptrend in copper.

After one week of consolidation the recent rally in oil markets is now increasingly at risk of running out of steam. The crisis in Iraq has not gone away but so far key oil installations remain untouched. So instead of focusing on the risk of supply disruptions the market was presented with several pieces of news which could eventually lead to increased supply thereby leaving both Brent and WTI crude oil vulnerable to a correction.

Staying with Iraq, the oil minister was out saying that he expects that oil production will continue to rise over the coming months while the Kurdistan regional government in northern Iraq is looking to increase exports through a newly-built pipeline to Turkey from a current 200,000 barrels per day (bpd) towards 400,000 bpd by the end of the year.

Meanwhile in Libya crude oil production has risen to 300,000 bpd as production sites increase production and at the same time the eastern Hariga oil port has finally reopened. The waves of protests from state security guards, militias and tribesmen have resulted in Libya’s production collapsing over the past year to the current low level from 1.6 million bpd back then. This has been one of the main geopolitical worries during this period and one of the key reasons why Brent crude oil, the global benchmark, has been averaging 109 USD/barrel so far this year instead of 105 USD/barrel.

WTI Crude oil remain supported but traders will be wary about a break back below 105 USD/oz as it may signal some additional weakness, initially down towards 102.70 USD/barrel followed by 101.60 USD/barrel.

Gold and silver managed to hold onto their recent gains but as the summer lull begins both metals are now treading water, especially gold where trading is now confined to a 1300 to 1330 USD/oz range. Silver has managed to consolidate its gains both outright but also relative to gold with the ratio having fallen to 62.5 (one ounce of gold measured in terms of ounces of silver), which is the lowest in four months.

Livestock best performer of 2014
Livestock has become the strongest-performing sector in 2014 with reduced supply of cattle lifting the price of meat to a record. Meanwhile, the US motoring season beginning in early July will kick off with the highest prices at the pumps since 2008, making this season the most expensive from a barbecue and driving perspective for several years.
Source: Saxo Bank