On June 14, crude oil broke the three-day gaining streak and fell to the lowest levels since mid-November 2016. On June 15, crude oil opened lower and traded with weakness.
The crude oil market is struggling to recover above the $50 price level amid weaker sentiment. Increased US crude oil inventories and producers’ failure to stick to pledged supply cuts are the main factors behind the oil market’s weakness on June 14–15. According to data released by the U.S. Energy Information Administration, crude oil inventory levels fell by 1.661 MMbbls (million barrels) last week—less than the forecasted decline of 2.739 MMbbls. According to the International Energy Agency’s monthly oil report, global oil glut might last until 2018. It also added that oil production rose in May despite supply cuts.
At 7:00 AM EST, West Texas Intermediate crude oil futures contracts for July 2017 delivery were trading at $44.59 per barrel—a fall of ~0.27%. Brent crude futures contracts for August 2017 delivery fell ~0.09% and were trading at $46.98 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $32.2 after falling 4.3% on June 14.
After falling for three consecutive trading days, copper opened lower on June 15 and traded at one-week low price levels. Concerns about China’s economy in the coming months amid weak investment data and credit tightening are weighing on copper prices. Considering that China is the largest copper consumer, economic conditions in China impact copper’s demand and price trends.
The PowerShares DB Base Metals ETF (DBB) fell 0.52%, while the SPDR S&P Metals & Mining ETF (XME) fell 2.9% on June 14. Gold (GLD) and silver (SLW) are weaker in the early hours amid the Fed’s interest rate hike. Platinum and palladium are also weaker in the early hours on June 15.