Forget Libya or Nigeria or even Iran. Traders unwound the risk on Brent/WTI spread as the soothing announcement from seemed to cheer their gullible little hearts despite skepticism from NATO and the United States.
Or maybe they believe his foreign minister. Dow Jones reports that Russia's defense minister ordered soldiers involved in military exercises near the border with Ukraine to return to their bases, reiterating a command from President Vladimir Putin. The order from Sergei Shoigu comes the day after Putin said he wanted the troops back at their bases and called for Ukraine's government to withdraw its military from the east of the country. The Russian troops' presence near the Ukrainian border has raised concerns in the West after Moscow annexed Crimea in March and an uprising by pro-Russia militants in Ukraine's eastern regions.
Libya has also been an issue that was lending support to the market overall. Libya's government imposed a no-fly zone over the embattled city of Benghazi following weekend clashes that left 70 dead and 140 injured. A rouge General says that he is in charge and has disbanded the parliament Khalifa Hiftar and he says that he is fighting Muslim extremists. In the meantime hopes that Libya would resume oil exports are now again in question.
The other factor that is allowing oil to stay somewhat anchored is record Gulf Coast supply. Yet the focus in this week's inventory will be Cushing Oklahoma. Many are amazed at the way supply is draining from the Nymex delivery point driving WTI higher than the cheaper grades in Gulf Coast. A worry about deliverable supply against the contract is supporting WTI into the report.
Copper (COMEX:HGM14) is rebounding hitting the highest level since early March on declining supply. Copper stored in the London Metal Exchange's global warehousing network, the world's largest metals storage network, are at their lowest level since September 2008 raising concerns that the talk of supply out stripping demand might have been a bit overly optimistic.
Gold (COMEX:GCM14) and silver (COMEX:SIM14) can't break out of its range yet perhaps when India takes the import tariffs off gold we can move. Reuters India reports that India's gold demand is likely to pick up in the second half of the year as curbs on bullion imports are expected to be eased by the country's new government, the World Gold Council (WGC) and other industry officials said.
Gold imports by India, the world's No. 2 bullion consumer after China, could double from current levels if the restrictions are eased, according to an industry estimate. This would help global prices that slumped 28 percent last year - the first drop in 13 years - partly due to India's curbs. Struggling with a ballooning trade deficit, India in 2013 imposed a record high duty of 10 percent on overseas purchases of gold, the second-biggest expense in its import bill, and introduced a rule tying import quantities to export levels.
Natural Gas (NYMEX:NGN14) is trying to rebound as forecasts are changing from below normal temperatures to above normal. This could thwart optimism that producers can replenish storage that as of last week was still 49% below the five year average. You also have to question whether the incentive to refill storage will be there I f prices fall too far.