Commodities Are Stable amid the Weaker Dollar
After falling on Thursday amid a rise in gasoline inventory levels, crude oil prices opened higher on Friday and tried to regain strength in the early hours.
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Crude oil prices are struggling to recover amid optimism about an extension of the supply cut agreement. The effect of the supply cut agreement was offset by the rise in US shale oil production. The increase in the US oil rig count also pulled oil prices down. The International Energy Agency’s report on the decline of conventional crude discoveries is supporting prices to some extent. According to the report, conventional crude discoveries in 2017 were 2.4 billion barrels, while the average in the last 15 years is 9 billion barrels. The numbers call for an increase in investments for crude discovery.
At 7:30 AM EST on April 28, the West Texas Intermediate crude oil futures contract for June 2017 delivery was trading at $49.57 per barrel—a gain of ~1.0%. The Brent crude futures contract for July 2017 delivery rose ~0.96% to $52.32 per barrel. The PDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $35.25 after falling 1.7% on April 27.
After pulling back on Thursday, copper prices opened higher today but struggling to move higher in the early hours. The market sentiment weakened due to Reuters polls. Expansion in China’s manufacturing activity is expected to slow down in April. Considering that China is the largest copper consumer, the copper demand in China will drive price trends. At 7:35 AM EST on April 28, the COMEX copper futures contract for July 2017 delivery was trading at $2.6 per pound—a gain of ~0.08%. The PowerShares DB Base Metals ETF (DBB) fell 1%, while the SPDR S&P Metals & Mining ETF (XME) fell 2% on April 27.
In the early hours, gold (GLD) and silver (SLW) are positive amid weakness in market sentiment due to the announced tax cut plan by Trump’s Administration. The weaker dollar also supported copper. Read Wall Street Is Stable amid Mixed Sentiment on April 27 to learn about the factors behind weaker sentiment on Wall Street. The weaker dollar supports the prices of dollar-denominated commodities such as copper, gold, and crude oil. Platinum and palladium are stable in the early hours.