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Weekly Commodities ETF Report: Crude Extends Weekly Gains on Supply Concerns Ahead of US Sanctions on Iran; Gold Rises as Dollar Weakens Following Sept Payrolls Report

(MT Newswires) -Crude ended Friday’s session higher, as the oil market grappled with the spare capacity needed to replace Iranian barrels next month. Although Russia and Saudi Arabia reportedly made a secret pact in September to increase output until December to partially make up for the loss of Iranian oil, it is feared that with little spare capacity at their disposal, OPEC and major non-OPEC producers may not be able to offset the likely drop in supply from early November. These supply concerns outweighed a surge in US inventories that was above what analysts had forecast in a weekly survey. The Energy Information Administration on Wednesday reported that crude supplies in the US surged by almost 8 million barrels last week, the biggest jump since March 2017. The increase was four times the level of expectations in a Reuters’ survey of analysts. This compares with the American Petroleum Institute’s report last Tuesday that US commercial crude inventories rose by 907,000 barrels to 400.9 million. Finally, Baker Hughes (BHGE) said late Friday the number of oil rigs operating in the US fell by two to 861. The combined oil and gas rig count in the US also slipped by two 1,052 as gas rigs were flat at 189.

Over the last five days, light, sweet crude oil for November delivery was up 1.09%, settling at $74.34 per barrel at the close of Friday’s session. In other energy futures, gasoline declined during the week, edging 0.15% lower and settling at $2.09 per gallon on Friday. Meanwhile, natural gas rose 5.03% this week but was down Friday at $3.14 per 1 million British thermal unit.

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) rose 0.97% this week, from an increase of 1.04% in the previous week.

Gold ended the Friday session higher, settling at $1,205.60 and eventually ending the week up 0.95%. The yellow metal bounced back from losses earlier in the week as the dollar weakened a bit after data showed the US economy saw a less-than-expected addition in employment in September.  The US Labor Department said that nonfarm payroll employment climbed by 134,000 jobs in September, while economists had expected an increase of about 185,000 jobs. The unemployment rate fell to 3.7% in September from 3.9% in August. Economists had expected the unemployment rate to edge down to 3.8%.  On the other hand, copper ended Friday’s session lower at $2.76, and fell 1.48% for the week.  The red metal’s prices were pressured by news that the Chinese manufacturing sector had slowed down in September on weaker domestic and international demand, showing the initial effects of US tariffs on China’s economy. The official China Federation of Logistics and Purchasing’s monthly purchasing managers index revealed that manufacturing activity decelerated to 50.8 from August’s 51.3.

Agriculture commodities ended the week mostly mixed. Sugar had a weekly increase of 12.68% and settled at a price of $0.13 per pound on Friday; coffee was around $1.09 per pound at Friday’s close, up 6.54% for the week; and cocoa fell 0.78% for the week and closed Friday’s session at $2,024 per tonne.  Among grains, wheat fell 2.45% and settled at $5.21 per bushel at the end of Friday’s session, while corn was up 3.23% in the week and settled at $3.68 per bushel in Friday’s session, hitting a two-month high as a forecast for rains sparked concerns over harvest delays. Heavy rains are expected across much of the western and central Midwest over the next week, likely affecting mature corn in major producing states including Iowa, Illinois and Minnesota. Meanwhile, soybeans rose 2.96% for the week, closing at $8.69 per bushel on Friday, following the Commerce Department’s report on the US trade deficit, reflecting an increase in imports and a decrease in exports. The data said the trade deficit widened to $53.2 billion in August from a revised $50.0 billion in July. Exports slipped 0.8% to $209.4 billion in August. Soybeans are among exported products that saw the sharpest decline, with shipments falling 28% due to retaliatory foreign tariffs on US crops.

The SummerHaven Dynamic Agriculture Index Total Return Index (SDAITR) rose 1.63% for the week, compared with an increase of 1.00% in the prior week.


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