After falling for four consecutive trading weeks, crude oil started this week on a weaker note. In the early hours on Monday, crude oil is trading with weakness at the lowest levels in a week.
The market sentiment is weak in crude oil amid devastating floods from Hurricane Harvey in the Gulf Coast. Floods inundated the refineries located along the coast of Texas, which caused 15% of the US refinery capacity to shut down. According to the weather forecast, more supply disruptions are expected—Saudi Aramco’s refinery in Port Arthur, Texas, and ExxonMobil’s Houston refinery. Saudi Aramco’s refinery has a daily refinery capacity of 600,000 barrels, while ExxonMobil’s refinery capacity is 560,000 barrels per day. Despite supply disruptions, oil prices are weak amid demand concerns from the Gulf Coast region.
According to data released by Baker Hughes on August 25, the oil rig count fell by four to 759. At 6:55 AM EST on August 28, the West Texas Intermediate crude oil futures contracts for October 2017 delivery were trading at $47.36 per barrel—a fall of ~1.1%. The Brent crude oil futures contracts for November 2017 delivery are flat and trading at $52 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $29.76 after rising 0.24% on August 25.
After gaining for seven consecutive trading weeks, copper started this week on a stronger note by opening higher on Monday. In the early hours, copper is trading with strength—at the highest levels since October 2014. The improved market sentiment in China and increased expectations of demand growth in the coming months are pushing copper higher. The weaker dollar is also supporting copper prices. Gold (GLD) and silver (SLW) are strong in the early hours on Monday amid weakness in the US dollar and political tension in the US. The weaker dollar supports the prices of dollar-denominated commodities like copper, gold, and silver. Platinum and palladium are also trading with strength in the early hours.