Why Are Commodities Weak Early on September 21?
After regaining strength last week, crude oil started this week on a mixed note but regained strength as the week progressed. It traded with weakness in the first two trading days but regained strength on Wednesday due to expectations of supply-side reforms. On Thursday, crude oil opened with decreased momentum and traded below the opening prices in the early hours.
Interested in GLD? Don't miss the next report.
Receive e-mail alerts for new research on GLD
Crude oil started this week amid decreased concerns about geopolitical factors like Hurricane Harvey and Hurricane Irma. Refineries restarted, which improved the market sentiment. The market’s outlook was upgraded after the release of the IEA’s (International Energy Agency) monthly report. The IEA reported an increase in the demand forecast for crude oil. According to data released by the U.S. Energy Information Administration, crude oil inventories rose by 4.591 MMbbls (million barrels) last week—higher than the market’s forecast of 3.493 MMbbls. Despite the rise in inventories, crude oil rose amid expectations of supply cut extensions in OPEC’s upcoming meeting. OPEC, Russia, and other major oil producers are meeting in Vienna on September 22 to discuss output cuts in 2018.
At 7:10 AM EST on September 21, the West Texas Intermediate crude oil futures contracts for November 2017 delivery were trading at $50.20 per barrel—a fall of ~0.97%. The Brent crude oil futures contracts for November 2017 delivery fell 0.75% and traded at $55.86 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $32.86 after rising 2.1% on September 20.
After falling for two consecutive trading weeks, copper started to regain its strength this week. China’s stronger-than-expected new loans data improved copper’s market sentiment. However, profit-booking and the strong dollar weighed on copper prices in the early hours on Thursday. Gold (GLD) and silver (SLW) are weak in the early hours on September 21. The market’s increased risk appetite after the Fed’s interest rate meeting statement and the strong dollar weighed on gold prices. The strong dollar weighs on the prices of dollar-denominated commodities like copper, gold, and silver. Platinum and palladium are weak in the early hours on Thursday.