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Commodity Markets

OPEC Monthly Oil Market Report – November 2017

9

manufacturing PMI advanced to a 78-month high of 53.5 in October, on further improvements in activity in

the US and the Euro-zone, amid stability in China. At the same time, previous concerns of some deceleration

in China Industrial Production receded after readings for the month of September showed 6.6% y-o-y

advance in the activity versus 6.0% a month earlier. Nickel prices advanced by 5.2%, buoyed by

expectations of increasing global use for stainless steel melting, which increased by 5% in the first half of the

year, according to

the Nickel Study Group

.

Meanwhile,

gold prices

retreated on average by 2.6%, largely due to increasing expectations for an

additional interest rate hike by the US Federal Reserve in December, while receding geopolitical concerns

also have played a part since mid-September.

Graph 2 - 1: Major commodity price indices

Graph 2 - 2: Inventories at the LME

Investment flows into commodities

OI

increased in October for selected US commodity futures markets such as natural gas and crude oil, while

declining for precious metals and copper. Meanwhile, in monthly terms, speculative net length positions

increased for crude oil, while declining for natural gas, precious metals and copper.

Table 2 - 2: CFTC data on non-commercial positions, ‘000 contracts

Henry Hub’s natural gas OI

increased by 4.5% m-o-m in October. Money managers decreased their net

length by 56% to 44,009 contracts on forecasts of milder-than-expected weather at the end of the month.

Copper’s OI

decreased by 2.5% m-o-m in October. Money managers decreased their net long positions by

6.4% to 109,000 contracts in September. Nonetheless, money manager net length is still the third highest on

record.

20

40

60

80

100

120

20

40

60

80

100

120

Oct 15

Dec 15

Feb 16

Apr 16

Jun 16

Aug 16

Oct 16

Dec 16

Feb 17

Apr 17

Jun 17

Aug 17

Oct 17

Index

Index

Energy

Non-energy

Food

Base metals

HH natural gas

Gold

Source: World Bank, Commodity price data.

Base year 2010 = 100

0

500

1,000

1,500

2,000

2,500

0

100

200

300

400

500

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

Oct 17

'000 Tonnes

'000 Tonnes

Copper

Lead

Nickel

Zinc

Pr. Aluminium (RHS)

Sources: London Metal Exchange and Thomson Reuters.

Sep 17

Oct 17

Sep 17

%OI

Oct 17

%OI

Crude oil

2,365

2,446

198

8

249

10

Natural gas

1,316

1,375

99

8

44

3

Agriculture

5,042

5,238

-191

-4

-252

-5

Precious metals

755

718

296

39

230

32

Copper

303

296

109

36

101

34

Livestock

640

659

154

24

190

29

Total

10,421

10,732

666

111

562

104

Note: Data on this table is based on monthly average.

Source: US Commodity Futures Trading Commission.

Open interest

Net length