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Commodities Are Mixed Early on December 12

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Dec. 12 2016, Published 7:21 a.m. ET

Crude oil rose

Crude oil rose in the early hours on December 12. Prices reached the highest levels since July 2015. Prices rose due to producers reaching an output cut agreement over the weekend. OPEC and non-OPEC producers reached the first production cut deal since 2001. OPEC producers agreed to cut the output by 558,000 bpd (barrels per day)—close to the target of 600,000 bpd. Russia is a non-OPEC producer. It agreed to cut the output by 300,000 bpd. OPEC producers agreed to cut production by 1.2 MMbpd (million barrels per day) in last month’s meeting.

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Saudi Arabia, one of the major exporters, said that it’s ready to cut the output more than the previously agreed 486,000 bpd. These comments, amid the output cut agreement over the weekend, sent oil prices higher. At 5:30 AM EST on December 12, the West Texas Intermediate crude oil futures contract for January 2017 delivery was trading at $53.75 per barrel—a rise of ~4.4%. The Brent crude futures contract for February 2017 delivery rose ~3.9% to $56.45 per barrel. The SPDR S&P Oil & Gas Exploration & Production (XOP) fell 0.39% on December 9.

Copper

Copper prices are weaker in the early hours amid the sell-off in Chinese markets and the firmer dollar. The market is looking forward to China’s industrial production data—a prime driver of copper prices. Weakness in the Chinese markets on December 12 and the firmer dollar are weighing on copper prices. At 5:40 AM EST on December 12, the copper futures contract for March 2017 delivery was trading at $2.62—a fall of 1.0%. The PowerShares DB Base Metals (DBB) rose 0.94%, while the SPDR S&P Metals & Mining (XME) fell 1.9% on December 9.

Precious metals

Interest rate hike expectations are weighing on gold (GLD) prices. At 5:45 AM EST, the COMEX gold futures contract for February delivery fell to $1,155.55 per ounce—the lowest level in ten months. The silver futures contract for March 2017 delivery fell ~0.21% to $16.93 per ounce. The platinum futures contract for January 2017 delivery was trading at $917.5 per ounce—a gain of ~0.28%. After consolidating last week, palladium is weaker in the early hours. At 5:45 AM EST, the palladium futures contract for March 2017 delivery was trading at $730.97 per ounce—a fall of ~0.56%.

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