Commodities Are Mixed, Dollar Weighs on Precious Metals
Crude oil prices fell for five consecutive trading weeks amid concerns about the supply glut. Crude oil prices started to rebound at the end of last week. Crude oil is stable early on June 26.
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Crude oil prices started to fall after OPEC members’ meeting about extending supply cuts. Despite a temporary stall in the decline, no strong upward movement was observed in crude oil’s price action in the past month. Even though oil rebounded in the last two trading days last week, the move isn’t enough to call it a recovery because it could be short covering. Higher inventory levels and the rising trend in US shale oil are some of the major reasons behind crude oil’s decline. According to data released by Baker Hughes, the US oil rig count rose to 758—the highest rig count level in three years.
At 7:20 AM EST, West Texas Intermediate crude oil futures contracts for August 2017 delivery were trading at $43.11 per barrel—a rise of ~0.23%. Brent crude futures contracts for September 2017 delivery rose ~0.04% and were trading at $45.77 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $31.02 after rising 2.7% on June 23.
After regaining strength last week, crude oil opened higher this week. Copper is stable in the early hours on Monday and trading near two-month high price levels. Investors’ confidence improved in Chinese markets amid the inclusion of mainland shares in the MSCI Index, which strengthened copper. Since China is the largest copper consumer, China’s economic conditions impact copper’s demand and price trends.
The PowerShares DB Base Metals ETF (DBB) rose 0.44%, while the SPDR S&P Metals & Mining ETF (XME) rose 2.4% last week. After closing flat last week, gold (GLD) and silver (SLW) are weaker in the early hours on June 26. Gold lost strength amid the firmer dollar and improved global sentiment. The firmer dollar weighs on dollar-denominated commodities like gold and silver. Platinum and palladium are weaker in the early hours.