Crude oil prices were weaker on Tuesday amid dented sentiment. In the early hours on Wednesday, crude oil is weaker and trading at two-week low price levels.
Fresh supply concerns weigh on oil
The sentiment in the crude oil market was dented after major oil producers’ meeting in Vienna. The extension of supply cuts by nine months without deeper cuts disappointed the oil market. The market became much weaker this week amid concerns about Libya’s increased oil production. The rise in US shale oil production has been one of the main factors that led to disappointing results in 2017. Libya and US shale oil production aren’t part of the supply cut agreement.
At 6:20 AM EST, West Texas Intermediate crude oil futures contracts for July 2017 delivery were trading at $48.78 per barrel—a fall of ~1.8%. Brent crude futures contracts for July 2017 delivery fell ~1.8% and were trading at $51.28 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $32.98 after falling 2.8% on May 30. The market is looking forward to the release of the American Petroleum Institute’s inventory report at 4:30 PM EST today.
After starting the week on a weaker note, copper prices are stable in the early hours. Copper started higher on Wednesday and traded higher amid China’s better-than-expected manufacturing data. Despite positive data, prices are slightly weaker—signs of weakening demand from China are still weighing on the sentiment. The PowerShares DB Base Metals ETF (DBB) fell 0.56%, while the SPDR S&P Metals & Mining ETF (XME) fell 0.51% on May 30.
Gold (GLD) is stable and silver (SLW) is weaker in the early hours on Wednesday. Gold lost momentum this week due to US economic data increasing the chance of an interest rate hike in June. Platinum and palladium are stable in the early hours.