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Supply Concerns Support Crude Oil and Copper

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Crude oil

After declining for two consecutive trading weeks, crude oil started this week on a weaker note by falling on Monday. However, crude oil regained strength and rebounded on Tuesday amid the improved sentiment. Carrying forward the strength, crude oil opened stronger on Wednesday and was trading with mixed sentiment in the early hours.

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Market sentiment

The market sentiment on crude oil was very weak at the beginning of this week amid the higher US crude oil output and US oil rig count levels. Crude oil staged a recovery on Tuesday following the release of inventory data, which highlighted a surprise draw. According to the American Petroleum Institute, the weekly crude oil stock declined by 2.03 million barrels last week. Concerns about a possible increase in OPEC’s output to counter supply concerns are weighing on crude oil prices in the early hours. Brent crude futures are trading with strength on Wednesday due to Venezuela’s inability to deliver crude oil exports amid political upheaval.

The market is looking forward to the release of the U.S. Energy Information Administration’s crude oil inventory report. The report is scheduled to be released at 10:30 AM EST today. At 6:25 AM EST on June 6, the WTI crude oil futures for July delivery were trading at $65.33 per barrel—a drop of 0.27%. The Brent crude oil futures for August delivery gained 0.61% and were trading at $75.84 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $41.07 after declining 0.24% on Tuesday.

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Copper

After trading with strength for two weeks, copper started this week on a stronger note and rose to three-month high price levels on Tuesday. Carrying forward the strength, copper started Wednesday stronger and was trading with strength at elevated levels in the early hours. Supply disruptions at the Escondida mine in Chile, the world largest copper mine, amid wage negotiations are supporting copper prices. The SPDR S&P Metals and Mining ETF (XME) gained 1.2% and closed at $38.11 on Tuesday.

Gold and silver are mixed in the early hours on Wednesday. Despite the falling US dollar, gold is weak in the early hours amid the improved global risk appetite and less trade war concerns. The SPDR Gold Shares (GLD) gained 0.39% and closed at $122.85 on Tuesday. Platinum is stable, while palladium is strong in the early hours on June 6.

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