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Weekly Commodities ETF Report: Crude Ends Week Lower as Middle East Tensions Recede; Gold Gains on Weak Jobs Report

(MT Newswires) – Crude dropped to the lowest in a month Friday as Persian Gulf tensions ebbed. The drop — the lowest since Dec. 11 — comes as traders try to assess proper security of supply premium as tensions between the US and Iran eased. Earlier in the week, crude had hit a five-month high as geopolitical tensions flared following the Jan. 3 assassination of Iranian general Qassem Soleimani, Iranian missile attacks on Iraqi military bases and the destruction of a Ukrainian passenger aircraft that the US, Canada, and others are blaming on Iranian air defenses.

On Wednesday, the Energy Information Administration said the US crude supplies surged by 1.2 million barrels over a week to Jan. 3, after falling in each of the previous three weeks. The jump surprised the market, which according to data compiled by S&P Global Platts, expected a drop of 3.7 million barrels. Meanwhile, the number of oil rigs operating in the US dropped by 11 to 659 during the week that ended on Jan. 10, the lowest level since March 2017, according to data compiled by energy services firm Baker Hughes (BKR). The combined oil and gas rig count in the US fell by 15 to 781 as gas rigs slid by four to 119.

Light, sweet crude oil for February delivery fell 6.14% for the week, settling at $59.56 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 5.05% over the last five days and settled at $1.65 per gallon on Friday. Natural gas was up 4.35% on the week, ending Friday at $2.17 per 1 million British thermal units.

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) fell 1.68% for the week, compared to a decrease of 0.19% in the prior week.

Gold ended higher on Friday, closing at $1,554.30 and with a weekly gain of 0.42%, reversing earlier losses as the US dollar dropped following a weaker-than-expected December jobs report, which showed that the US economy added just 145,000 jobs in December, well under both the 180,000 increase forecast by Action Economics and the 256,000 jobs added in November. Likewise, copper rose during Friday’s session, ending at a settlement price of $2.80 to close the week 1.11% higher.  Prices were boosted by low inventories and tight supplies; a softer dollar and firmer yuan also provided support. Meanwhile, Chile’s state copper agency Cochilco reported that copper output at mines owned by Codelco, as well as at the Escondida mine owned by BHP, had slumped in November, as riots and mass protests continued in the country. Chile is one of the world’s biggest copper producers.

In agricultural commodities news, Caixin Global reported Tuesday that China will keep its yearly global import quotas for certain grains for 2020 amid its pledge to increase imports of US agricultural products to between $40 billion and $50 billion as part of the country’s phase-one trade deal with the US. The report, which cited China’s Agriculture and Rural Affairs Vice Minister Han Jun, noted there is substantial room to expand imports of wheat, rice and corn as China had not used its yearly global import quotas for the said grains. Han earlier said US farm product imports in the first 10 months of 2019 only totaled $10.4 billion following sharp decreases in the previous two years due to the trade war. He added imports of soybeans, pork and poultry will be increased after the signing of the trade agreement.

Among grains, soybeans logged a weekly gain of 0.48%, closing Friday’s session at $9.46 per bushel; corn rose 0.19% for the week, settling Friday at a price of $3.86 per bushel; and wheat ended the week up 1.58%, closing the Friday session at a price of $5.65 per bushel. Other commodities were mixed:  sugar had a weekly increase of 6.02% and settled at a price of $0.14 per pound on Friday; coffee was around $1.19 per pound at Friday’s close, down 6.54% for the week; and cocoa was up 2.86% for the week and closed Friday’s session at $2,589 per tonne.


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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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USO002108 Ex. 2/29/2020