Commodities Were Mixed in the Week Ending June 23
After falling for four consecutive trading weeks, crude oil entered last week with dented sentiment.
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The sentiment in the crude oil market is weaker amid supply concerns including increased global oil production and high inventory levels. Weakness in crude oil prices resumed after OPEC producers’ meeting about extending the supply cut agreement. Even though the supply cut agreement was extended into 2018, the lack deeper supply cuts dragged oil prices lower. The crude oil market officially entered a bear market in the week ending June 23. A 20% fall in any financial instrument, like stocks or commodities, is considered a bear market. Signs of increased production in Nigeria also dented the market sentiment. Crude oil prices rebounded at the end of last week amid comments from major OPEC producers to stick to production cuts.
West Texas Intermediate crude oil futures contracts for August 2017 delivery closed the week at $43.01 per barrel—a fall of ~3.87%. Brent crude futures contracts for June 2017 delivery fell ~3.86% and closed the week at $45.54 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $31.02 after falling 2.0% in the week ending June 23.
After a disappointing week, copper started last week with positive sentiment. Improved sentiment in Chinese markets boosted copper’s demand expectations and supported the price rally last week. Considering that China is the largest copper consumer, economic conditions in China impact copper’s demand and price trends.
The PowerShares DB Base Metals ETF (DBB) rose 2.7%, while the SPDR S&P Metals & Mining ETF (XME) rose 3.8% last week. Despite a weak start last week, gold (GLD) and silver (SLW) regained strength as the week progressed and closed flat. Gold is stronger amid the pullback in the dollar and dented global sentiment. The weaker dollar supports dollar-denominated commodities like gold and silver. Platinum ended almost flat last week and palladium fell.