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Weekly Commodities ETF Report: Crude Ends Week Lower as Tariffs on Mexican Imports Hurt Global Energy Demand; Gold Higher on Safe-Haven Sentiment

(MT Newswires) – Crude ended Friday’s session lower, heading for the second week of declines as US President Donald Trump’s threats to impose tariffs on Mexico, the largest recipient of US oil exports, added to concerns that a worsening trade environment would undermine global energy demand. Trump had tweeted that the US would impose a 5% tariff on all goods from Mexico — in a bid to curb the supposed high flow of illegal immigrants into the US from Mexico. Back home, the Energy Information Administration reported that inventories fell by 282,000 barrels over a week to May 24 – that compared with expectations for an 857,000-barrel drop in a Reuters’ survey of analysts. The American Petroleum Institute, which released crude supplies data a day later than usual due to the Memorial Day holiday, said the crude inventories fell by 5.3 million barrels. Finally, energy services firm Baker Hughes (BHGE) reported Friday that the number of oil rigs operating in the US rose by three in the week that ended on May 31 to 800. The combined oil and gas rig count in the US rose by one to 984 as gas rigs fell by two to 184.

Light, sweet crude oil for July delivery fell 8.47% for the week, settling at $56.59 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 8.13% during the week and settled at $1.85 per gallon on Friday. Natural gas fell 4.69% for the week, settling at $2.55 per 1 million British thermal unit.

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) was 1.95% lower this week.

Gold wrapped up the Friday session at $1,292.40 with a 7-week high; earlier in the session it breached the psychologically important $1,300.00 level after the US threat to impose tariffs on Mexican imports, even as it continued with its protracted trade war with China, sent traders scurrying for less riskier assets. Gold rose 2.13% in the last five days. Meanwhile, copper closed Friday’s session at $2.65 per pound, and fell 1.88% for the week even as speculators off-loaded their positions in industrial metals amid fears of a global recession. With the lower-than-expected manufacturing data from China reported Friday, investors are now concerned that the protracted trade war between the US and China has contributed to a slowdown in Asia’s biggest economy. China’s official manufacturing Purchasing Managers Index (PMI) fell to 49.4, down from 50.1 in April. Econoday estimates had been expecting a reading of 50.0.

In agriculture commodities, corn rose 9.55% in the week and settled at $4.27 per bushel in Friday’s session; wheat jumped 7.57% and settled at $5.03 per bushel at the end of Friday’s session; and soybeans was up 7.04% for the week, and closed Friday in the red at $8.78 per bushel. Earlier this week, Bloomberg reported that China said it is putting purchases of American soybeans on hold as the trade war between the two countries escalated. However, China did not cancel purchases that have already been made. The largest soybean buyer has yet to take delivery of about 7 million tons of US soybeans, which it had committed to buying for the current marketing year, the report added. Other commodities were mostly higher: sugar had a weekly increase of 3.78% and settled at a price of $1.21 per pound on Friday; coffee was around $1.05 per pound at Friday’s close, up 12.64% for the week; and cocoa was down 0.91% for the week and closed Friday’s session at $2,400 per tonne.

The SummerHaven Dynamic Agriculture Index Total Return Index (SDAITR) was down 3.20% for the week.

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