Commodity Momentum: Focus on silver

Our commodity momentum monitor is showing no change from yesterday in what turned out to be a relatively quiet day. All four metals however managed to pop higher but so far the follow-through remains elusive with gold getting stuck ahead of USD 1600/oz and silver running tired before attempting a test of the late February high at USD 29.45/oz. Silver has the potential of returning to positive momentum today but it requires maintaining current levels above 29.
Oil markets, especially WTI crude oil, ticked higher with the discount to Brent crude narrowing to the lowest level in five weeks. Apart from new pipeline capacity in the US making it possible to move more WTI oil from the production area in the central US to Gulf Coast refineries, the continued easing of the tightening (lower backwardation) seen recently in the front end of the Brent futures curve has also helped.
OPEC raised its output to a three-month high last month according to their latest update while the IEA today cut its 2013 estimate for global oil demand. Both organisations currently see demand side risk while the supply side is supported by a continued ramp-up in US production on track to reach the highest level in three decades. Weekly US inventory data are due later today at 14:30 GMT.