After rising to one-week high price levels, crude oil prices continued to trade higher in the early hours on May 11. The rally is supported by a decline in crude oil inventories along with the expectation of a supply cut agreement extension.
The market sentiment improved due to inventory reports released by the American Petroleum Institute and the EIA (U.S. Energy Information Administration). According to the API, crude oil inventory levels in the week ending on May 5 fell by 5.789 MMbbls (million barrels). According to the EIA, crude oil inventory levels in the week ending on May 5 fell by 5.247 MMbbls, while the market expected a decline of 1.786 MMbbls. According to a recent report, Saudi Arabia plans to cut the supply to its Asian customers by 7 MMbbls in June.
The market is waiting for OPEC’s monthly report scheduled to release today. At 7:10 AM EST, West Texas Intermediate crude oil futures contracts for June 2017 delivery were trading at $47.98 per barrel—a gain of ~1.4%. Brent crude futures contracts for July 2017 delivery rose ~1.3% and were trading at $50.89 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $35.64 after rising 2.3% on May 10.
After losing momentum this week and trading below $2.5 per pound, copper prices regained strength and rose in the early hours. Copper prices rallied in the early hours amid short covering in copper futures. Copper investors’ focus shifted to China’s economic releases—China is the largest copper consumer. The market is looking forward to investment and industrial activity in China scheduled to release next week. The PowerShares DB Base Metals ETF (DBB) fell 0.38%, while the SPDR S&P Metals & Mining ETF (XME) rose 0.77% on May 10.
Gold (GLD) and silver (SLW) are stronger in the early hours on May 11. Gold regained strength as the US dollar lost momentum amid the dismissal of FBI Director James Comey. Platinum and palladium are stable in the early hours on May 11.