After showing weakness for three consecutive trading weeks, crude oil opened lower this week. Crude oil continues to move lower. The rise in US crude oil storage made the oil market weaker and dragged the price lower.
According to data released by the API (American Petroleum Institute), crude oil inventory levels rose by 4.53 MMbbls (million barrels) in the week ending on March 17. The build in inventory levels was higher than the market’s expectation of an increase by 2 MMbbls. The market is looking forward to crude oil inventory data from the U.S. Energy Information Administration. The data will be released at 10:30 AM EST today.
The increase in inventory levels, despite output cuts by OPEC and non-OPEC producers, is weakening the sentiment in the crude oil market. At 6:55 AM EST on March 2, the West Texas Intermediate crude oil futures contract for April 2017 delivery was trading at $47.56 per barrel—a fall of ~1.4%. The Brent crude futures contract for May 2017 delivery fell ~1.5% to $50.20 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $35.69 after falling 2.2% on March 21.
After falling for two consecutive trading days, copper prices are trading lower in the early hours on Wednesday. A strike at the Escondida mine in Chile, which is the world’s largest copper mine, is expected to end amid talks to resolve the issue. Also, production at the Grasberg mine resumed after halting for a month. These factors are weighing on copper prices in the early hours.
At 7:00 AM EST on March 22, the COMEX copper futures contract for May 2017 delivery was trading at $2.6 per pound—a fall of ~0.86%. The PowerShares DB Base Metals ETF (DBB) fell 1.1%, while the SPDR S&P Metals & Mining ETF (XME) fell 3.4% on March 21. Gold (GLD) and silver (SLW) are stable to weaker in the early hours amid the sell-off in US markets. Platinum and palladium are weaker in the early hours.