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Early Morning Update: Energy, Metals, and Mining Sector

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Updated

Crude oil

  • Crude oil prices are weaker early on November 28 amid doubts about the successful execution of supply cuts.
  • Prices are volatile in the early hours as Saudi Arabia canceled its talks with non-OPEC producers scheduled for November 28.
  • At 7:00 AM EST, the WTI crude oil futures contract for January 2017 delivery was trading at $45.71 per barrel—a fall of ~0.78%. The Brent crude futures contract for January 2017 delivery fell ~0.73% to $47.90 per barrel.
  • In its previous meeting in Algeria, OPEC announced a supply cut for its members to 32.5 MMbpd–33 MMbpd (million barrels per day). The market is looking forward to producers’ meeting on November 30 in Vienna. Individual supply quotas will be declared.
  • The market is also waiting for the weekly crude oil inventory reports from the U.S. Energy Information Administration and the American Petroleum Institute. The data will be released on November 29 and November 30.
  • The PowerShares Dynamic Energy Exploration & Production Portfolio (PXE) and the SPDR S&P Oil & Gas Exploration & Production (XOP) were lower in the early hours.
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Copper

  • Copper is moving towards its best month in a decade. So far, it rose more than 18% in November.
  • The improved global manufacturing PMI data and strong domestic demand signals from China and the US are supporting copper prices.
  • According to data released by Markit last week, the Eurozone manufacturing PMI for October rose to 53.7. The US manufacturing PMI rose to 53.9.
  • Expectations about an increase in US infrastructural spending under Donald Trump improved the market sentiment.
  • The PowerShares DB Base Metals (DBB) and the SPDR S&P Metals & Mining (XME) are slightly lower in the early hours.

Precious metals

  • Gold rebounded from multi-month lows in the early hours on November 28 amid a pullback in the dollar. On the other hand, gold is feeling the pressure of an increase in US interest rate hike expectations.
  • At 7:15 AM EST, the gold futures contract for December delivery was trading at $1,189 per ounce—a gain of ~0.9%.
  • The platinum futures contract for January 2017 delivery was trading at $916.85 per ounce—a gain of ~0.94%.
  • The silver futures contract for December delivery was trading at $16.77 per ounce—a gain of ~1.3%.
  • After rising to 17-month high price levels last week, palladium is holding its ground at fresh 2016 highs. At 7:15 AM EST, the palladium futures contract for March 2017 delivery was trading at $750.03 per ounce—a gain of ~0.96%.
  • The SPDR Gold Shares (GLD) inched higher in early hours.
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