The expected slowdown in Chinese commodity imports finally showed up in preliminary April trade data and seems in-line with both our and the market’s expectations.

The recent correction in risky asset markets has also sent residual fuel oil prices sharply lower. We still see a risk of specific tightness in global fuel oil supply over the summer. See our latest webcast where we discuss the outlook for residual fuel oil.

Calmer waters in the oil market have sent implied volatilities in crude option prices to 5-year lows. We argue that event risks are plentiful in the coming months.

Prices to trend higher as global demand rebounds.

The next leg upwards for base metals, notably copper and aluminium, could be approaching. Copper and aluminium buyers should therefore be aware and consider hedging their price risks accordingly.

We doubt that Saudi Arabia’s latest efforts to calm the oil market will alone be enough to cool sentiment or bring oil prices down to the Kingdom’s desired USD 100/barrel level, as OPEC’s effective spare capacity will quickly fall below the comfortable threshold of 3% of global supply.

It is too early to call the end of the commodities boom.

It’s exciting times in the oil markets and yesterday the Brent Oil price reached USD 120/barrel for the first time since June last year.

We have raised our baseline average Brent oil price forecast for 2012E to USD 118/barrel from our 1 December forecast of USD 109/barrel.

Metals prices driven by Eurozone debt crisis and China slowdown.