The crude oil market sentiment was mixed in the week ending July 21. Crude oil fell in three out of five trading days last week and closed the week with losses.
The crude oil market was mixed last week—demand hopes and supply concerns took turns dominating the market. Oversupply conditions in the market weighed on crude oil prices until the second week of July. The sentiment improved after the IEA’s (International Energy Agency) monthly report. It reported that crude oil’s demand growth has been accelerating. The report caused demand expectations to offset the market’s supply concerns. The market rose to six-week high levels after the draw-down in inventory levels. According to data released by the U.S. Energy Information Administration, crude oil inventory levels fell by 4.727 MMbbls (million barrels) in the week ending on July 14—a bigger inventory level drop than the market’s anticipated fall of 3.214 MMbbls.
The market was cautious before the OPEC and non-OPEC technical committee meeting on July 22. OPEC’s meeting will be followed by a ministerial-level meeting on July 24. Last week, West Texas Intermediate crude oil futures contracts for August 2017 delivery fell 1.7% and closed the week at $45.77 per barrel. Brent crude futures contracts for September 2017 delivery fell ~1.7% and were trading at $48.06 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $31.65 after falling 0.81% last week.
Copper started the week on a stronger note amid China’s stronger-than-expected economic data, which improved the economic outlook in 2H17. Since China is the largest copper consumer, its economic outlook will be impacted by copper’s demand and price trends. The weaker dollar also supported copper last week. The PowerShares DB Base Metals ETF (DBB) fell 0.06%, while the SPDR S&P Metals & Mining ETF (XME) rose 1.6% last week. Gold (GLD) and silver (SLW) were strong last week. The dented market sentiment amid political concerns in the US supported gold prices along with the weaker dollar. The weaker dollar supports dollar-denominated commodities like gold and silver. Platinum was strong, while palladium lost strength last week.