Crude oil regained strength in the past week and broke its three-week-long losing streak. Crude oil opened this week on a stronger note and surged to mid-2015 highs. In the early hours of Thursday, crude oil was trading with strength at elevated prices amid improved sentiment.
The market sentiment on crude oil has improved recently due to the improved demand-supply balance outlook. In addition to this, the supply concerns triggered by the North Sea pipeline outage along with the weakness of the US dollar this week supported crude oil prices. The increased drawdown of crude oil inventories by China along with an increase in import quotas for 2018 improved the demand outlook of crude oil in 2018 and supported oil prices. As per the American Petroleum Institute (or API), the US weekly crude oil inventories declined by 6 MMbbls, a higher drawdown than the expected decline of 3.8 MMbbls.
At 5:00 AM EST on December 28, the West Texas Intermediate crude oil futures for February 2018 delivery were trading at $59.73 per barrel, a gain of 0.17%. The Brent crude oil futures for March 2018 delivery rose 0.18% to $66.11 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $37.34 after declining 0.8% on December 27.
Following a strong performance for two trading weeks, copper started this week on a stronger note. On Thursday, copper surged to its highest levels traded since January 2014. The improved demand for copper from China, the biggest consumer of the metal, is pushing prices higher.
Precious metals gold (GLD) and silver (SLW) were strong in the early hours on Thursday. The weakness in the dollar this week has been supporting the rally in gold. The weaker dollar supports the prices of dollar-denominated commodities like gold and silver. Platinum was strong, while palladium was weak in the early hours on Thursday.