Crude oil prices fell as low as 4% on Wednesday and reached the lowest levels in more than two weeks amid a rise in gasoline inventory levels. Crude oil prices opened higher on Thursday and recovered some losses.
Oil inventories fell
On the other hand, crude oil inventory levels recorded a fall last week. According to data released by the American Petroleum Institute on Tuesday, crude oil inventory levels in the week ending April 14 fell by 0.84 MMbbls (million barrels). The U.S. Energy Information Administration reported a fall of 1.03 MMbbls last week. Supporting inventory reports limited the losses triggered by the rise in gasoline inventory levels.
Chance of supply cut extension
Comments by Saudi Arabia and Kuwait increased speculation about the supply cut extension. Kuwait’s oil minister, Essam al-Marzouq, commented that he expects the supply cut agreement to be extended. He added that OPEC and non-OPEC producers’ compliance with the supply cut agreement increased. Saudi Arabia’s oil minister, Khalid al-Falih, said that producers are still discussing the output cut extension.
At 6:50 AM EST on April 20, the West Texas Intermediate crude oil futures contract for June 2017 delivery was trading at $51.36 per barrel—a gain of ~1%. The Brent crude futures contract for June 2017 delivery rose ~1.1% to $53.53 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $34.95 after falling 2.8% on April 19.
Copper opened lower but regained strength due to the weaker dollar. Increased selling in copper, amid geopolitical tension, weighed on copper prices this week. Copper started to regain strength amid a decrease in geopolitical tension. At 6:55 AM EST on April 20, the COMEX copper futures contract for May 2017 delivery was trading at $2.55 per pound—a gain of ~0.49%. The PowerShares DB Base Metals ETF (DBB) rose 0.64%, while the SPDR S&P Metals & Mining ETF (XME) fell 1.7% on April 19. Gold (GLD) and silver (SLW) were slightly weaker in the early hours. Decreased geopolitical tension lowered the demand for safe-haven commodities like gold and silver. Platinum and palladium are stable in the early hours.