Commodities Are Weak in the Early Hours on September 26
After rising for three consecutive trading weeks, crude oil started this week on a stronger note by rising on Monday. On Tuesday, crude oil started amid improved sentiment and traded near multimonth highs.
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The sentiment in the crude oil market improved at the beginning of the month. Refineries that were impacted by Hurricane Harvey restarted their operations. Crude oil’s increased demand outlook by the International Energy Agency boosted the market sentiment. The signs of rebalancing in the crude oil market along with increased expectations of OPEC extending the supply cut agreement supported crude oil prices. The threats by Turkish President Tayyip Erdogan to disrupt the oil flow from Iraq to Turkey also boosted the oil prices. The market is looking forward to the American Petroleum Institute’s report on weekly crude oil inventory levels.
At 7:00 AM EST on September 26, the West Texas Intermediate crude oil futures contracts for November 2017 delivery were trading at $52.01 per barrel—a fall of ~0.4%. The Brent crude oil futures contracts for November 2017 delivery fell 0.72% and traded at $58.01 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $33.98 after rising 2.9% on September 25.
After falling for two trading weeks, copper started this week on a stronger note. Copper pulled back for three weeks due to profit-booking at elevated levels and doubts about China’s economic stability in 2H17. Copper is stable in the early hours on Tuesday. The sentiment improved due to oil’s rally and Asian Development Bank upgrading China’s growth forecast.
Gold (GLD) and silver (SLW) are weak in the early hours on Tuesday. The US dollar’s strength in the early hours is weighing on gold, while North Korea concerns are limiting gold’s losses. The strong dollar weighs on the prices of dollar-denominated commodities like copper, gold, and silver. Platinum is weak, while palladium is strong in the early hours on September 26.