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Weekly Commodities ETF Report: Crude Ends the Week Higher as IEA Boosts 2020 Production Forecasts; Gold Also Up on Positive US-China Trade News

(MT Newswires) – Crude ended Friday’s session higher after the International Energy Agency (IEA) boosted its estimate for 2020 production from non-member countries of the Organization of the Petroleum Exporting Countries (OPEC). The IEA raised its production forecasts by 100,000 barrels per day, saying new oil from the United States, Brazil, Norway and Guyana will add 2.3 million barrels per day in 2020. It also said that oil demand will fall by 90,000 bpd in 2019, the first drop since 2009. Oil had also risen after an OPEC official said he expects lower growth from US shale oil producers in 2020. Mohammed Barkindo, OPEC’s secretary-general, told reporters at an Abu Dhabi oil conference that a slowdown in US shale drilling could become worse in 2020, and that output might rise by only as much as 400,000 barrels per day. A slower rise in US output would create more room for OPEC exports next year but Barkindo did not say if OPEC is planning further production cuts when it meets with Russia in December to decide on the future of its existing 1.2 million barrels per day of quota restrictions. Meanwhile, the Energy Information Administration (EIA) said Nov. 13 that US oil inventories in the previous week rose by 2.2 million barrels, more than twice the one-million-barrel rise expected, on average, by analysts. The data was contrary to a day-prior survey from the American Petroleum Institute, which showed a decrease of more than 500,000 barrels in US oil stocks. Finally, the number of oil rigs operating in the US dropped by 10 to 674 during the week that ending Nov. 15, the lowest level since April 2017, according to data compiled by energy services firm Baker Hughes. The combined oil and gas rig count in the US fell by 11 to 806 as gas rigs slid by one to 129.

Light, sweet crude oil for December delivery rose 0.59% for the week, settling at $56.77 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 0.06% over the five-day period and settled at $1.62 per gallon on Friday. Natural gas was down 3.94% for the week, ending Friday at $2.65 per 1 million British thermal unit.

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) declined 0.50% on the week, compared with a decline of 1.66% in the prior week.

Gold ended Friday lower at $1,473.40 and the week up 0.52%, as the US dollar weakened following optimism over developments in the closely watched Sino-American trade negotiations. Larry Kudlow, the White House trade adviser, said that a partial deal to end the trade war between the world’s two largest economies is near, but that US President Donald Trump made no commitments. Kudlow’s statement came after days of uncertainty on the trade front, with Trump denying reports that Washington will roll back higher tariffs on Chinese goods and threatening more import levies if a deal is not be signed between the two countries. On the other hand, copper prices rose during Friday’s session, ending at a settlement price of $2.62 but ultimately closed the week 1.93% lower, as lower demand due to weakening global economic growth outweighed the positive trade deal news.

In agricultural commodities news, weekly exports for soybeans exceeded the US Department of Agriculture’s forecasts, with total soybean exports reaching 46.2 million bushels during the week, versus 66.4 million in the prior week. The rate to reach the department’s forecast is 21.4 million bushels.  China remains the top destination for soybean exports. Corn export sales improved to 22.9 million bushels from the prior week’s tally of 19.2 million bushels — lower than the weekly rate needed to reach the USDA expectations of 34.4 million bushels. Wheat sales, meanwhile, were 8.8 million bushels, down from 13.3 million bushels and versus the weekly rate needed to match USDA forecasts of 13.5 million bushels. Soybeans ended the week 1.32% lower, closing Friday’s session at $9.18 per bushel; corn declined 1.53% on Friday, settling at a price of $3.71 per bushel; and wheat ended the week down 1.37%, closing the Friday session at a price of $5.03 per bushel. Other commodities were mostly higher:  sugar had a weekly increase of 1.35% and settled at a price of $0.13 per pound on Friday; cocoa was up 7.91% for the week and closed Friday’s session at $2,681 per tonne;  and coffee was around $1.10 per pound at Friday’s close, up 1.19% for the week.

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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