After a huge fall on March 8, crude oil prices continued to fall in the early hours on March 9. The selling in the oil market was triggered by a rise in crude oil inventories. Oil prices fell more than 5% on Wednesday.
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According to data released by the U.S. Energy Information Administration on Wednesday, crude oil inventory levels rose by 8.21 MMbbls (million barrels) in the week ending on March 3—the ninth consecutive weekly build. It’s a higher build than the market’s expectations of a build of 1.97 MMbbls. It dented the sentiment in the market. The increase in inventory levels is offsetting the support from OPEC and non-OPEC producers’ supply cuts. As a result, WTI (West Texas Intermediate) crude oil fell below $50 for the first time since the beginning of December 2016.
On March 26, there will be a meeting in Kuwait to review output cut compliance for OPEC and non-OPEC producers. At 6:15 AM EST on March 9, the WTI crude oil futures contract for April 2017 delivery was trading at $49.18 per barrel—a fall of ~2.2%. The Brent crude futures contract for May 2017 delivery fell ~2.1% to $52.01 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $35.95 after falling 4.3% on March 8.
After falling for three consecutive trading days, copper prices are lower in the early hours on Thursday. Increased expectations of an interest rate hike are strengthening the US dollar and weighing on copper prices. The firmer dollar weighs on dollar-denominated commodities such as copper, gold, and crude oil. Miners’ plans to restart production at the Escondida mine in Chile are also weighing on copper prices. At 6:20 AM EST on March 9, the COMEX copper futures contract for May 2017 delivery was trading at $2.56 per pound—a fall of ~1.4%. The PowerShares DB Base Metals ETF (DBB) fell 0.44%, while the SPDR S&P Metals & Mining ETF (XME) fell 0.85% on March 8.