Commodities Are Stable, Gold Is Weaker Early on May 9



Crude oil

After regaining some strength at the end of last week, crude oil opened this week on a stable note. Crude oil prices are stable in the early hours on May 9.

In the past three days, even though the oil market looks stable, the overall sentiment in the market is weaker amid increased supply and weak demand signals. Weakness in China’s manufacturing and construction activities signals weak demand. The increase in oil rigs and rise in US shale oil production is weighing on prices. The market expects OPEC and non-OPEC producers to extend the supply cut agreement to support the oil market. On the other hand, increased inventories also dented the sentiment.

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The market is waiting for crude oil inventory data by the American Petroleum Institute scheduled to release today. The market is also waiting for OPEC’s monthly report scheduled to release on May 11. At 6:55 AM EST, West Texas Intermediate crude oil futures contracts for June 2017 delivery were trading at $46.63 per barrel—a gain of ~0.43%. Brent crude futures contracts for July 2017 delivery rose ~0.39% and were trading at $49.53 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $35.29 after rising 1.3% on May 8.


After falling to a four-month low on Monday, copper prices are stable in the early hours. Stability in Chinese markets on Tuesday supported copper prices. However, the firmer dollar is weighing on copper. At 6:55 AM EST on May 9, COMEX copper futures contracts for July 2017 delivery were trading at $2.5 per pound—a rise of ~0.1%. The PowerShares DB Base Metals ETF (DBB) fell 1.2%, while the SPDR S&P Metals & Mining ETF (XME) fell 0.17% on May 8.

Gold (GLD) and silver (SLW) were weaker in the early hours on May 9 amid the firmer dollar and decreased risk appetite. The firmer dollar weighs on dollar-denominated commodities like gold and copper. Emmanuel Macron’s victory in France’s presidential election improved the global sentiment and weighed on precious metals. Platinum is weaker, while and palladium is stable in the early hours on May 9.



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