Commodities Are Weaker amid the Firmer Dollar
After trading in a range on July 4, crude oil prices lost strength on July 5. In the early hours on Wednesday, crude oil traded lower with weakness.
Interested in DBB? Don't miss the next report.
Receive e-mail alerts for new research on DBB
Crude oil gained for eight consecutive trading days until July 3, which is the longest rising streak for crude oil since January 2010. However, the sentiment was dented on Monday amid reports about increased OPEC production. According to a Reuters survey, OPEC’s crude oil production rose by 280,000 barrels per day to 32.72 million barrels per day. Increased exports from Nigeria and Libya also signaled an increase in crude oil output. On Wednesday, oil started to fall after after Bloomberg’s report about Russia’s opposition deepening proposed supply cuts.
At 7:20 AM EST, West Texas Intermediate crude oil futures contracts for August 2017 delivery were trading at $46.34 per barrel—a fall of ~1.6%. Brent crude futures contracts for September 2017 delivery fell ~1.3% and were trading at $48.96 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $32.61 after rising 2.2% on July 3.
After closing flat on July 4, copper prices were weaker in the early hours on July 5. The increase in copper inventory levels and concerns about copper demand from China are weighing on copper prices. On the other hand, losses were limited by the possible strike on two of Antofagasta’s copper mines in Chile.
The PowerShares DB Base Metals ETF (DBB) rose 0.37%, while the SPDR S&P Metals & Mining ETF (XME) rose 0.33% on July 3. On Monday, after falling to the lowest levels since May 10, they rebounded on July 4 amid dented global sentiment after North Korea’s missile launch test. However, improved global sentiment on Wednesday weighed on gold (GLD) and silver (SLW) prices in the early hours. The stronger dollar also weighed on precious metals. The firmer dollar weighs on dollar-denominated commodities like gold and silver. Platinum and palladium are weaker in the early hours.