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Weekly Commodities ETF Report: Gold Ends Lower as Uncertainty Over US-China Trade Talks Resurface; Crude Logs Gains on Possible Push for OPEC Production Cuts by Saudi Arabia

(MT Newswires) – Crude ended Friday’s session higher following reports that the Organization of the Petroleum Exporting Countries (OPEC) will not agree to new production cuts when it meets with Russia next month to decide on the future of their 1.2 million barrels per day in output restrictions. However, Saudi Arabia will reportedly push for lower output ahead of the Initial public offering (IPO) of Saudi Arabian Oil Co., or Aramco — a move that would help drive oil prices higher. Meanwhile, stockpiles of US commercial crude surged in the week ending Nov. 1, posting a bigger build than the previous period. Inventories rose 7.9 million to 446.8 million barrels, putting the stockpiles about 3% above the five-year average for this time of year. A week earlier, crude stockpiles were up 5.7 million barrels and were 1% above the norm. This compares with the American Petroleum Institute’s weekly survey, which showed US oil inventories rose by 4.3 million barrels for the period. Finally, the number of oil rigs operating in the US fell for the third straight week, dropping by seven to 684 in the week ended Nov. 8, according to energy services firm Baker Hughes.  

Light, sweet crude oil for November delivery rose 2.13% for the week, settling at $57.15 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 1.36% over the last five days and settled at $1.64 per gallon on Friday. Natural gas was up 3.33% on the week, ending Friday at $2.77 per 1 million British thermal unit.  

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) fell 2.01% for the week, compared with a decline of 0.30% in the prior week.

Gold ended Friday at $1,466.40 and the week down 3.80%, with prices slipping lower after the US-China trade talks took a sour turn as reports that tariffs will be rolled back as part of the countries’ phase one trade deal were denied by a US trade official. There have also been reports that some US officials were opposed to a partial deal with China that would see the two countries roll back tariffs imposed during the trade spat.  This has caused renewed concerns that the two countries are not as close to a deal to end their long-running trade war as thought. Similarly, copper prices fell during Friday’s session, ending at a settlement price of $2.73 but ultimately closed the week 1.01% higher. The industrial metal has seen lowered demand after China, the world’s top consumer of copper, reported a 3.1% drop in copper imports in October, attributing the decline to tepid growth in its manufacturing sector.

In agricultural commodities news, the US Agriculture Department (USDA) slashed its forecasts for the corn harvest, citing cold and wet conditions late in the growing season, which cut into yields, particularly in areas like South Dakota, Nebraska and Minnesota — key areas for production of the crop. The USDA also cut its forecasts for wheat production but maintained its guidance for the soybean harvest. Soybeans also ended the week 0.69% lower, closing Friday’s session at $9.31 per bushel; corn declined 3.09% on Friday, settling at a price of $3.77 per bushel; and wheat ended the week down 0.97%, closing the Friday session at a price of $5.10 per bushel. Other commodities were mostly higher: sugar had a weekly increase of 0.72% and settled at a price of $0.13 per pound on Friday; cocoa was up 1.34% for the week and closed Friday’s session at $2,498 per tonne; and coffee was around $1.09 per pound at Friday’s close, up 4.36% for the week.

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Information Contact: Justin Hillstrom – 720.917.0770 Email: Justin.hillstrom@alpsinc.com, Website is www.uscfinvestments.com

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The SummerHaven Dynamic Commodity Index Total ReturnSM (SDCITR) is an index designed to reflect the performance of a portfolio of 14 commodity futures. The index is reformulated each month from 27 possible futures contracts. The 14 selected contracts are equally weighted and represent six sectors: Energy (WTI crude oil, Brent crude oil, natural gas, heating oil, gasoil, RBOB gasoline), Precious Metals (gold, silver, platinum), Industrial Metals (aluminum, copper, lead, nickel, tin, zinc), Grains (corn, soybeans, soybean meal, soybean oil, wheat), Livestock (live cattle, feeder cattle, lean hogs) and Softs (coffee, cocoa, cotton and sugar). One Cannot invest directly in an index.

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The Caixin Manufacturing PMI Purchasing Managers’ Index measures the performance of the manufacturing sector and is derived from a survey of private 430 industrial companies. The Manufacturing Purchasing Managers Index is based on five individual indexes with the following weights: New Orders (30 percent), Output (25 percent), Employment (20 percent), Suppliers’ Delivery Times (15 percent) and Stock of Items Purchased (10 percent), with the Delivery Times index inverted so that it moves in a comparable direction.

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USO002079 Ex. 12/31/2019