Crude oil advanced after a report showed that US inventories rose less than was predicted by analysts, while refineries increased their production. US stockpiles of crude grew just by 0.3 million barrels last week. Refineries boosted their capacity utilization by 1 percentage point to 82.8 percent. March futures for crude oil delivery rose $0.3 to $98.71 per barrel on NYMEX.
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US industrial production expanded 0.4 percent in December. The Empire State Manufacturing Survey showed that manufacturing advanced this month. There are more reports this week that should show positive developments in the US economy.

Futures for delivery of copper in three months advanced 1.6 percent to $8,372 per metric ton on LME, the highest settlement since September 21, before trading at $8,332.50. That was the fourth day of gains.
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China’s gross domestic product increased 8.9 percent in the fourth quarter of 2011, following the 9.1 percent expansion in the third quarter. That was the slowest growth in 10 quarters. The report fueled talks that the country will perform measures to stimulate economic growth.

ZEW Economic Sentiment for Germany increased from -53.8 to -56.1 (month-on-month) in January, the highest level since July 2011. Economic expectations for the eurozone improved to -32.5 this month from -54.1 in the month before.

Standard & Poor’s downgraded credit ratings of several European countries on January 13. Markets were downbeat somewhat after the action, but quickly recovered as such move was expected and generally priced in.

February futures for delivery of crude oil advanced $2.01 (2 percent) to $100.71 per barrel on NYMEX. Brent oil rose from $111.42 to $111.57 per barrel as of 23:54 GMT today on ICE. Corn price was higher from $6.0125 to $6.0600 per bushel on CBoT today, while soybeans rallied from $11.6300 to $11.8275 per bushel.
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Both commodities also gained on rumors that Iran made headway in creating nuclear weapon. Gold rallied as the rumors increased its appeal as a safe asset, while oil rose on concerns that sanctions against the country from the USA would disrupt shipments.

February futures for crude oil delivery advanced as much as $4.13 to $102.96 per barrel on NYMEX, the highest price since May 10. Brent crude surged from $108.38 to $112.07 per barrel today as of 23:18 GMT on ICE. Gold was up from $1,570.10 to $1,606.70 per ounce, while silver spot price went higher from $28.17 to $29.55 per ounce on COMEX.
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Copper performed better on hopes that the US economic growth would outweigh the problems in Europe and the slowdown in China. The US PMI is expected to post a positive reading next week. The US economy grew 1.8 percent this year and analysts predict that it’ll expand 2.1 percent in 2011. Copper advanced from $3.4220 to $3.4315 per pound on COMEX.
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There were other reasons for the drop of oil. OPEC increased its production ceiling for the first time in three years. China’s manufacturing continued to decline this month, albeit with slower pace. China’s Manufacturing PMI fell to 49.0 in December from 47.7 in November, according to the flash HSBC/Markit estimate.

January futures for crude oil rose $0.01 to $94.96 per barrel, in electronic trading on NYMEX, following yesterday’s 5.2 percent drop to $94.95, the lowest closing price since November 4. Brent traded at $106.14 per barrel as of 4:33 GMT today on ICE after it tumbled during yesterday’s trading session from $109.47 to $104.83.
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Corn was up from $5.8000 to $5.8575 per bushel on CBoT today, following the intraday drop to $5.7000 per bushel. Soybean price advanced from $11.2550 to $11.3000 per bushel today after falling earlier to $11.2025 per bushel.

Wheat was a different story as it declined on the forecast that the demand will decrease, while stockpiles will grow, yet the crop was also trying to erase its losses by the end of the trading session. Economists expect China to reduce its wheat import as the nation’s economy is slowing. Market forecasters predict that the report of the US Department of Agriculture on December 9 will show that the global wheat inventories rose 202.89 million tons, compared to the November estimate of 202.6 million tons.

Wheat closed at $5.9775 per bushel on CBoT down from the opening price of $6.0050, but significantly above the daily low of $5.8825.
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The industrial metal may still rebound on the optimism about Europe and the positive economic data from the United States. The US manufacturing PMI rose from 50.8 to 52.7 in November, while the construction spending advanced 0.8 percent, two times the forecast value.

Copper traded at $3.5315 per pound today as of 4:51 GMT on COMEX, following the yesterday’s drop from $3.5560 to $3.5255 per pound.
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Corn also advanced, but its gains were limited on the outlook for higher supply from South America. On the other hand, economists argue that lower price may prompt China to expand its import, boosting demand for the agricultural commodity. Corn spot price rose from $6.0275 to $6.0450 per bushel today on CBoT.
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The members of the US congressional debt-reducing supercommittee failed to reach agreement about budget cuts. Germany’s Finance Ministry admitted that the country’s economic growth became “noticeably slower”.

China may increase its imports of soybeans, supporting prices, but for now the negative fundamentals have upper hand. As for iron ore, even China isn’t going to support the commodity as demand in the Asian nation wanes.

Soybean settlement was at $11.5025 per bushel as of 9:24 GMT today on CBoT after falling yesterday from $11.7100 to $11.4575 per bushel and touching today $11.4100 per bushel — the lowest level since October 8, 2010.

Spot price for ore climbed to $147.40 per metric ton yesterday. Prices were up 24 percent this month, while ore dropped 31 percent in October and analysts predict it’ll resume its decline next month.
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The optimism, caused by the revealing the plans for rescuing Greece and other indebted nations of the European Union, quickly evaporated and traders still are caution, resulting in sluggish trading. Greek Prime Minister George Papandreou said he’s going to put the bailout plans for Greece to a referendum. The country may face a default in case the referendum would result in negative vote.

China’s Purchasing Manager’s Index declined to 50.4 in October from 51.2 in the month before, while an increase was predicted. The data from the US was also negative as the Chicago PMI also declined. A decline was expected, but only to 59.2, while the index actually fell to 58.4 in October from 60.4 in September.

Brent crude oil fell from $109.44 to $108.90 per barrel today as of 2:54 on ICE, following the drop from $110.14 to $109.19 yesterday.
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The European leaders agreed to increase the bailout fund. The European banks will voluntary write down 50 percent of Greece’s debt. Traders were waiting for good news from Europe for quite some time and after receiving such news were ready to risk in search of profit instead of playing safe. The resulting risk appetite spurred commodities across the board.

Bears aren’t disappointed, though, as the end for the European debt story is far away and the problems are still plaguing the Eurozone. China also makes the futures of industrial metals, and copper in particular, uncertain as the slower economic growth in the Asian nation can damp demand. And don’t forget that there is the US with its problems. All in all, copper currently is in good grace of traders, but its prospects are unclear.

Copper traded at $3.6970 per pound as of 2:07 GMT today in electronic trading on COMEX, following the surge to $3.6890 from $3.4880 per pound yesterday.
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