Commodities Are Strong in the Early Hours on August 10
Commodities are strong in the early hours on Thursday despite the firm dollar. After losing momentum last week, crude oil started this week on a weaker note by pulling back on Monday. Despite the decline in inventories, crude oil fell on Tuesday. It regained strength on Wednesday and continued to move higher in the early hours on Thursday.
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Crude oil regained strength amid the supporting inventory report released on Wednesday. According to data released by the American Petroleum Institute, crude oil inventories fell by 7.839 MMbbls (million barrels) in the week ending August 4. It was a bigger fall than the market’s forecasted fall by 2.2 MMbbls. In addition to the supporting inventory data, Saudi Arabia’s announcement to cut exports to Asian customers by 10% in September pushed crude oil higher. On the other hand, OPEC revised up the demand forecast for crude oil in 2018 by 220,000 to 32.42 MMbpd. The expectations of increased demand amid falling inventory levels are supporting the oil prices. The market is looking forward to the release of the US oil rig count data that are scheduled to release on Friday.
At 7:15 AM EST on August 10, the West Texas Intermediate crude oil futures contracts for September 2017 delivery were trading at $49.89 per barrel—a gain of ~0.67%. Brent crude futures contracts for October 2017 delivery rose ~1.0% and were trading at $53.22 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $30.82 after rising 0.36% on August 9.
After gaining for three consecutive trading days, copper pulled back on Wednesday amid China’s mixed economic data. On Thursday, copper is trading with weakness in the early hours. On the other hand, increased confidence in China’s economic stability in 2H17 supported copper prices. The PowerShares DB Base Metals ETF (DBB) fell 0.23%, while the SPDR S&P Metals & Mining ETF (XME) fell 0.46% on August 9.
Gold (GLD) and silver (SLW) prices are strong in the early hours on Thursday. Gold rose to two-month high levels in the early hours amid weak global sentiment due to tensions with North Korea. Platinum and palladium are strong in the early hours on August 10.