After losing momentum last week, crude oil started this week on a weaker note by pulling back on Monday, August 7. Despite the fall in inventories, crude oil fell on Tuesday. After a brief fall on Wednesday, crude oil resumed its weakness and fell on Thursday to its lowest level in more than two weeks. On Friday, crude oil opened the market with a lower sentiment, trading below its opening prices in the early hours.
Crude oil regained strength amid the supporting inventory report released on Wednesday. According to data released by the American Petroleum Institute, crude oil inventories fell 7.8 MMbbls (million barrels) in the week ended August 4. It was a bigger fall than what the market had forecast at 2.2 MMbbls. The expectations of increased demand amid falling inventory levels briefly supported oil prices. But oil lost strength after the IEA (International Energy Agency) said that market rebalancing may take more time than previously anticipated. Despite expectations of demand growth, the rebalancing will take more time due to weak compliance by producers to the supply cuts proposed by OPEC (Organization of the Petroleum Exporting Countries).
At 6:55 AM EST on August 11, WTI (West Texas Intermediate) crude oil futures contracts for September 2017 delivery were trading at $48.27 per barrel, a fall of ~0.68%. Brent crude oil futures contracts for October 2017 delivery fell ~0.50% and were trading at $51.64 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $30.37 after falling 1.5% on August 10. The market is looking forward to the release of US oil rig count data scheduled to be released at 1:00 PM EST today.
After gaining for three consecutive trading days, copper pulled back on Wednesday amid China’s mixed economic data. On Thursday, copper continued to fall and opened lower on Friday. In the early hours on Friday, copper was trading below its opening prices. On the other hand, increased confidence in China’s economic stability in the second half of 2017 supported copper prices. The PowerShares DB Base Metals ETF (DBB) fell 0.17%, while the SPDR S&P Metals and Mining ETF (XME) fell 0.66% on August 10.
Gold (GLD) and silver (SLW) prices were stable in the early hours on Thursday when gold rose to a two-month high amid increased demand for safe-haven assets. Platinum and palladium, the other precious metal commodities, were also stable in the early hours of August 11.