After gaining for five consecutive trading days, crude oil prices are stable in the early hours. Crude oil prices are at the highest level in five weeks. Increased optimism about the supply cut agreement extension supported the market rally.
Market waits for producers’ meeting
The crude oil market is looking forward to OPEC and non-OPEC crude oil producers’ meeting scheduled on May 25 in Vienna. The market expects an extension in the supply cut agreement and a potentially deeper supply cuts. The supply cut agreement that came into action at the beginning of this year didn’t support oil prices as planned. The increased supply of US shale oil along with an increase in inventory levels offset the support by supply cuts.
With major oil producers’ energy ministers supporting the supply cut agreement extension, oil prices are stable. According to data released by the American Petroleum Institute on Tuesday, crude oil inventory levels fell by 1.5 MMbbls (million barrels) in the week ending May 19—a lower draw in inventory levels than the expected decline of 2.7 MMbbls. The market is looking forward to the crude oil inventory report by the U.S. Energy Information Administration scheduled at 10:30 AM EST on Wednesday. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $35.21 after falling 0.09% on May 23.
After rising for three days and reaching the highest levels in three weeks, copper prices are weaker in the early hours on Wednesday. Copper lost strength after Moody’s downgraded China’s credit rating. Considering that China is the largest copper consumer, China’s economic conditions impact copper’s demand and price trends.
The PowerShares DB Base Metals ETF (DBB) rose 0.38%, while the SPDR S&P Metals & Mining ETF (XME) rose 1.7% on May 23. China’s lower credit ratings also weighed on gold (GLD) and silver (SLW) in the early hours. The gold market is looking forward to the FOMC’s policy minutes, which are scheduled to release at 2:00 PM EST today. Platinum and palladium are weaker in the early hours.