Despite starting this week on a stable note, crude oil lost strength as the week progressed amid supply concerns. On June 21, crude oil fell and closed the day at the lowest levels since August 12, 2016. In the early hours on Thursday, crude oil prices are stable at lower levels.
Despite the slight rebound in oil prices in the early hours, the oil market sentiment is still weak. The crude oil market lost strength after oil producers’ official meeting to control the supply glut. Failure to deepen supply cuts in the supply cut extension agreement dented the market sentiment. According to data released by the U.S. Energy Information Administration on June 21, crude oil inventory levels fell by 2.5 MMbbls (million barrels) in the week ending June 16. It’s a higher draw from inventory levels than the expected decline of 2.1 MMbbls. With many factors acting against oil sentiment, the fall in inventory levels didn’t support oil prices.
At 7:30 AM EST, West Texas Intermediate crude oil futures contracts for August 2017 delivery were trading at $42.78 per barrel—a gain of ~0.59%. Brent crude futures contracts for August 2017 delivery rose ~0.85% and were trading at $45.2 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $30.17 after falling 3.3% on June 21.
Copper started this week on a stronger note but lost strength as the week progressed. After losing some strength on Tuesday, copper regained strength and rose on Wednesday due to tighter copper supply conditions. The dollar pulled back and supported copper prices. In the early hours on Thursday, copper prices are stable at the highest levels in ten days.
The PowerShares DB Base Metals ETF (DBB) rose 1.0%, while the SPDR S&P Metals & Mining ETF (XME) fell 0.04% on June 21. Gold (GLD) and silver (SLW) are stronger in the early hours. Gold is stronger amid the pullback in the dollar and weaker Treasury yields. The weaker dollar supports dollar-denominated commodities like gold and silver. Platinum and palladium are stable in the early hours on June 22.