Brent Prices Continue to Soften
Brent crude prices have been falling steadily for the past three weeks having come down from $119 per barrel to $109 per barrel. It has been a relentless drubbing that coincided with the peak of the Euro and further exacerbated by the results of the Italian election along with poor commodity demand numbers hitting the market from around the world. In reading the Platt’s Metals Daily every morning I can tell you that there hasn’t been any good pricing news in base metals for the past two weeks with major demand slow downs softening prices for everything from Aluminum to Molybdenum to the extremely-important Copper.
Speaking of Copper, prices there have been stuck at ~$3.55 per pound for days and continue to act as a non-confirmation of the U.S. equity market surge to near all-time highs.
Today the failed breakout in Brent crude and violent sell off from $110.50 back near $109.10 is further proof that the global economy is simply not healthy at a fundamental level and no amount of money printing and cheerleading from the media will change that. Gold is beginning to sniff a top in stocks, oil and gas prices have fallen back to January levels and are now simply waiting for gold to catch up before rising on incipient money flow.
Once the stock market is no longer the preferred path for Fed largesse to the banks commodities will be the recipients of the hot money flows as inflation expectations will begin to rule the markets again versus the strange kind of hopium currently goosing them higher.