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Weekly Commodities ETF Report: Crude Settles Lower as Trade Woes Offset Hopes for OPEC Output Cuts; Gold Ends Week in the Red

(MT Newswires) – Crude ended Friday’s session lower as trade concerns offset expectations that the Organization of the Petroleum Exporting Countries (OPEC) and Russia will renew their production cut agreement when they meet next month. Trade worries have kept a lid on oil prices as investors watch for news on the progress of trade talks between China and the United States. China’s President Xi Jinping made his first comments on the talks Friday, with the South China Morning Post reporting he supports talks to reach an initial deal with the United States but will fight back against arbitrary US measures. Expectations that OPEC and Russia will extend their agreement to keep 1.2 million barrels per day off the market has added support for oil. Russian President Vladimir Putin said his country will continue to cooperate with OPEC in a supply-cut agreement. On Tuesday Reuters had reported that Russia will not support a Saudi push for additional production cuts when it meets with OPEC next month but may commit to extending their existing deal to reduce their combined output by 1.2 million barrels per day. Meanwhile, the US Energy Information Administration said oil inventories had risen by 1.4 million barrels the previous week, placing stocks at 3% under the five-year average. The rise compares with expectations of industry experts polled by S&P Global Platts for a 1.54 million-barrel build for the week and a rise of 5.95 million barrels in commercial supplies reported late Tuesday by the American Petroleum Institute. Finally, the number of oil rigs operating in the US fell for the fifth straight week to a nearly 32-month low. The crude-equipment tally fell by three to 671 in the week through Nov. 22 to remain at their lowest level since 662 were operating in the week ended March 31, 2017, data from Houston-based energy services firm Baker Hughes (BKR) showed. A year ago, there were 885 oil rigs operating. For oil and gas, the US total number of rigs working for the week fell by three to 803.

Light, sweet crude oil for December delivery gained 0.21% for the week, but settled lower at $58.58 per barrel at the end of Friday’s session. In other energy futures, gasoline was up 2.12% over the last five days and settled at $1.70 per gallon on Friday. Natural gas was up 1.23% for the week, ending Friday at $2.62 per 1 million British thermal unit.

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) fell 0.81% on the week, compared with an increase of 0.07% in the prior week.

Gold ended Friday lower at $1,463.60 and the week down 0.44%, as a higher US dollar checks demand. However, the price of the metal has seen some support due to trade worries over the ongoing US-China trade war, as the market awaits a conclusion to trade talks between the two countries amid conflicting reports over their progress. Copper prices, meanwhile, rose during Friday’s session, ending at a settlement price of $2.62 and closing the week 0.28% higher,  after the World Bureau of Metal Statistics (WBMS) reported that the world copper market recorded a deficit of 203 kilo tonnes in the first nine months of this year, versus 284 kilo tonnes for the whole of 2018. The global copper consumption came in at 17.56 million tonnes in the January to September period, which was down from 17.86 million tonnes in the corresponding period last year.

In agricultural commodities news, soybeans ended the week 2.42% lower, closing Friday’s session at $8.97 per bushel, following reports that the signing of a phase one trade deal between the US and China may be postponed until next year. Meanwhile, corn declined 0.61% on Friday, settling at a price of $3.69 per bushel; and wheat ended the week down 2.98%, closing the Friday session at a price of $5.19 per bushel. Other commodities were mostly higher:  sugar had a weekly increase of 0.63% and settled at a price of $0.13 per pound on Friday; cocoa was down 2.45% for the week and closed Friday’s session at $2,617 per tonne;  and coffee was around $1.16 per pound at Friday’s close, up 4.81% 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