Commodities Were Weak in Early Hours of August 15

Pre-Market Research: Global Markets Strengthen Amid Risk Appetite PART 4 OF 4

Crude oil

Commodities were weak in the early hours of Tuesday, August 15, with a firm dollar. 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. In the early hours of Tuesday, crude oil is trading with weakness.

Market sentiment

The sentiment is weak in the crude oil market amid oversupply concerns and doubts over an expected demand surge in the second half of 2017. Crude oil lost strength after the IEA (International Energy Agency) said that market rebalancing could take more time than previously anticipated due to weak compliance of producers to the supply cut agreement. The market is looking forward to the release of crude oil inventory data by the API (American Petroleum Institute), which is scheduled to release today. The market is also waiting for the weekly crude oil inventory report by the EIA (U.S. Energy Information Administration) on August 16. The market is expecting inventory levels to fall 3.2 MMbbls.

At 6:50 AM EST on August 15, WTI (West Texas Intermediate) crude oil futures contracts for September 2017 delivery were trading at $47.38 per barrel, a fall of ~0.44%. Brent crude oil futures contracts for October 2017 delivery fell ~0.51% and were trading at $50.47 per barrel. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) closed at $30.10 after falling 1.1% on August 14.

Metals

After gaining for five consecutive trading weeks, copper started this week on a weaker note amid concerns over China’s economy. The weaker-than-expected industrial production in China, which saw its slowest pace since January 2017 last month, dented the sentiment in the copper market. The firmer dollar is also weighing on copper prices in the early hours of Tuesday. Gold (GLD) and silver (SLW) were weaker in the early hours on Tuesday. Gold lost strength as North Korean tensions eased, which boosted investors’ risk appetite. The strength of the dollar in the early hours also weighed on precious metals. Platinum and palladium, the other precious metal commodities, were also weak in the early hours of August 15.

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