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Commodities Are Weaker in the Early Hours on January 25

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Crude oil

After posting moderate gains on Tuesday, crude oil prices pulled back in the early hours. The increase in crude oil stockpile data released by the API (American Petroleum Institute) on Tuesday is weighing on the prices. According to the API, crude oil inventories rose by 2.9 MMbbls (million barrels) last week. It’s higher than the market’s expectation of 2.8 MMbbls. The market is looking forward to the U.S. Energy Information Administration’s crude oil inventory report. The report is scheduled to release at 10:30 AM EST today.

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On the other hand, the losses are limited by signs of producers sticking to the supply cut agreement. Jabar Ali al-Luaibi, Iraq’s oil minister, said that Iraq already reduced its oil output by 180,000 bpd (barrels per day). He added that it plans to cut 30,000 bpd more by the end of January. At 6:20 AM EST on January 25, the West Texas Intermediate crude oil futures contract for March 2017 delivery was trading at $52.67 per barrel—a fall of ~0.96%. The Brent crude futures contract for March 2017 delivery fell ~0.97% to $54.90 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $41.34 after rising 1.6% on January 24.

Metals

After rising to the highest levels in a week on Tuesday, copper prices fell in the early hours. Copper’s trading volumes are expected to fall due to China’s Lunar New Year holidays. The copper demand in the US is expected to grow 2.5%. The demand signals are stronger amid Trump’s infrastructural plans. At 6:35 AM EST on January 25, the COMEX copper futures contract for March 2017 delivery was trading at $2.70 per pound—a fall of ~0.5%. The PowerShares DB Base Metals ETF (DBB) and the SPDR S&P Metals & Mining ETF (XME) rose 1.4% and 3.1%, respectively, on January 24. Gold (GLD) and silver (SLW) fell in the early hours due to the expectation of a fall in Chinese demand ahead of the Lunar New Year holidays. Platinum and palladium are weaker in the early hours.

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