SMM Comment (May 11): Non-Ferrous and Ferrous Metals Go Down, Oil Outperforms on Firm Fuel Demand in the World's Largest Oil Consumer, Dollar Climbs, US April CPI Data Triggers Financial Market Volatility

SHANGHAI, May 11 (SMM) - Crude oil: Crude oil prices rose slightly today. As of CST 15:00, WTI and Brent oil both rose 0.3%.

That was supported by firmer data on fuel demand in the United States, the world's largest oil consumer. The official website of the Organization of the Petroleum Exporting Countries (OPEC) announced on May 11 that the reference price of OPEC's basket of crude oil was $76.6 per barrel on Wednesday, compared with $76.31 per barrel in the previous trading day. On the crude oil supply side, in Alberta, Canada's main oil-producing region, some oil and gas facilities resumed operations as wildfires eased due to cooler weather. Seven of the nine factories closed due to the wildfires have resumed operations and are returning to their previous production rates. Entering the implementation month of OPEC's initiative to reduce production, OPEC will implement a production reduction of 3.65 million barrels per day until the end of 2023. The current production reduction scale is about 3.5% of global oil production, and it is still the largest driver on the supply side. However, Russia's seaborne crude oil exports have always been high, making the market think that the extent of OPEC's production cuts remains to be seen. Today's focus is on OPEC's upcoming monthly report, which may give an optimistic outlook on supply and demand.

Major risks are macro sentiment swings due to the US debt ceiling and banking problems.

In terms of the U.S. dollar: The U.S. dollar index rose today. As of CST 15:01, the U.S. dollar index rose 0.37%.

The April CPI data released by the United States overnight dropped, which to some extent weakened expectations for raising interest rates. After the release of the CPI data, the financial market fluctuated sharply. In addition, the issue of the US debt ceiling is still causing concern. If the debt ceiling cannot be resolved for a long time, there will be an unprecedented long-term default. The resulting impact includes a deep recession in the economy and a soaring unemployment rate.

Macro aspects: pay attention to the annual rate of M2 money supply in China in April; the central bank interest rate decision in the UK until May 11; the number of initial jobless claims in the United States until May 6, the annual rate of PPI in April, and the monthly rate of PPI in April.

Metals: As of close of today's daytime session, SHFE base metals closed down across the board (nickel fell 5.36%, copper fell nearly 3%,  zinc fell 2.08%, aluminum fell 41.42%, and tin fell 0.24%), except for rise of 0.13% in lead. Ferrous metals also closed down across the board, with iron ore down 3.46%, HRC down 2.95%, rebar down 2.65%, coke down 2.43%, stainless steel down 1.36%, and coking coal down 1.26%.

LME metals also went down. As of CST 15:07, nickel fell 2.13%, aluminum fell 1.94%, copper fell 1.72%, zinc fell 1.54%, lead fell 0.94%, and tn fell 0.78%.

In terms of precious metals, as of CST 15:07, COMEX gold fell 0.13%; COMEX silver fell 1.14%.