Commodities Are Mixed in the Early Hours on August 16

Pre-Market Report: Strong Global Markets, Improved Risk Appetite PART 6 OF 6

Crude oil

Commodities are mixed in the early hours on August 16. Crude oil prices fell lower for two consecutive trading weeks amid oversupply concerns. Crude oil continued its weakness and started this week on a weaker note by falling on Monday. After closing the day mixed on Tuesday, crude oil is stable in the early hours on August 16.

Market sentiment

The crude oil market’s sentiment is weak amid oversupply concerns and doubts about the expectation of higher demand in 2H17. However, the market regained some strength on Tuesday amid the supporting weekly crude oil inventory report. According to data released by the API (American Petroleum Institute), crude oil inventories fell by 9.2 MMbbls (million barrels) in the week ending on August 11. It improved the market sentiment and supported crude oil prices. The market is looking forward to the release of the weekly crude oil inventory report by the EIA (U.S. Energy Information Administration) at 10:30 AM EST today. The market is expecting inventory levels to fall by 3.2 MMbbls.

At 7:10 AM EST on August 15, the WTI (West Texas Intermediate) crude oil futures contracts for September 2017 delivery were trading at $47.73 per barrel—a gain of ~0.36%. Brent crude oil futures contracts for October 2017 delivery rose ~0.55% and were trading at $51.08 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $29.97 after falling 0.43% on August 15.

Metals

After gaining for five consecutive trading weeks, copper started this week on a weaker note amid concerns about China’s economy. Weaker-than-expected industrial production in China, which saw its slowest pace since January 2017 last month, dented the sentiment in the copper market. After briefly pulling back in the first two trading days this week, copper regained strength on Wednesday and traded with strength in the early hours. Gold (GLD) and silver (SLW) were weaker in the early hours on Wednesday. The improved global market sentiment and increased risk appetite took the shine out of safe-haven assets like gold. The dollar’s strength in the early hours also weighed on precious metals. Platinum and palladium are stable in the early hours on August 16.

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