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Weekly Commodities ETF Report: Crude, Gold Hit Multi-Year Lows as Global Concerns Over COVID-19 Outbreak Deepen

(MT Newswires) – Crude oil prices continued to slump on Friday, dropping for the sixth-straight session to the lowest since the end of 2018 as the coronavirus continued its spread outside of China, and quarantines and travel restrictions slashed demand. According to Johns Hopkins University data, South Korea now has 2,337 cases of the virus out of 83,774 reported worldwide, while Italy has 655 cases and the number of fatalities worldwide has risen to 2,867. The World Health Organization has raised the global risk for the coronavirus, or COVID-19, to  “very high” — which aims to drive countries to intensify their responses to the spreading virus.

The Organization of the Petroleum Exporting Countries (OPEC) has yet to respond to the crisis, which has sapped demand for oil as airlines reduced flights to slow the spread of infections and quarantines shuttered businesses and factories. The OPEC+ group, which includes OPEC members, Russia and other oil-producing nations, will meet next week to consider a response as reports say Saudi Arabia has cut shipments to Chinese refineries by 500,000 barrels per day on reduced demand.

Crude stockpiles increased last week, marking a fifth consecutive rise at a time that oil prices have been dragged sharply lower by concerns about the continued spread of the coronavirus. Inventories increased by 500,000 barrels through Feb. 21 to reach 443.3 million barrels, the Energy Information Administration said Wednesday. Inventories are about 3% below the five-year average for this time of year. A week earlier, stockpiles rose by 400,000 barrels.  This also compares with expectations for a 2.8 million-barrel increase by industry experts polled by S&P Global Platts while the American Petroleum Institute reportedly said Tuesday supplies grew by 1.3 million barrels the previous week. Finally, the count for oil rigs operating in the US rose by one to 679 in the week through Friday, according to data compiled by energy services firm Baker Hughes (BKR). A year ago, the US had 853 oil rigs in operation.

Light, sweet crude oil for April delivery fell 15.34% for the week, settling at $47.09 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 15.39% over the last five days and settled at $1.52 per gallon on Friday. Natural gas ended the week down 11.12%, settling at $1.75 per 1 million British thermal unit at the end of Friday’s session.

The SummerHaven Dynamic Commodity Total Return Index (SDCITR) fell 6.71% for the week, compared with an increase of 1.43% in the prior week.

Gold took its biggest one-day drop in nearly seven years, falling almost 5% despite another day of big stock-market losses and a falling dollar. Investors have been looking to liquidate assets as the spread of the coronavirus roils the global economy. The yellow metal ended Friday’s session at $1,642.50 and the week down 3.94%.

“One might imagine that there would be robust demand for gold in this environment, yet precisely the opposite is true this morning,” Commerzbank analyst Daniel Briesemann said in a note. “We attribute this to forced selling aimed at offsetting losses elsewhere and covering so-called margin calls. The emerging speculations of interest rate cuts are lending no support to gold.”

Likewise, copper was lower on Friday, with a settlement price of $2.57; it also closed the week in negative territory, down 2.31%, as coronavirus concerns continued to put a damper on demand for the red metal.

In agricultural commodities, soybean prices slipped lower on Friday as export sales continued to be weak, closing the session at $8.93 per bushel but ultimately rising 0.56% for the week. Weekly export data showed that sales to China were just 11,484 metric tons — the lowest weekly total since early September 2019.

Among other grains, corn fell 2.19% for the week, settling at a price of $3.68 per bushel on Friday; and wheat ended the week down 4.98%, closing the Friday session at a price of $5.25 per bushel. Other commodities were mixed:  sugar had a weekly decline of 6.08% and settled at a price of $0.14 per pound on Friday; coffee was around $1.11 per pound at Friday’s close, up 1.63% for the week; and cocoa was down 5.29% for the week and closed Friday’s session at $2,672 per tonne.


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Commodity trading is highly speculative and involves a high degree of risk. Commodities and futures generally are volatile and are not suitable for all investors. Investing in commodity interests subject each Fund to the risks of its related industry. An investor may lose all or substantially all of an investment. These risks could result in large fluctuations in the price of a particular Fund’s respective shares. Funds that focus on a single sector generally experience greater volatility. Leveraged and inverse exchange-traded products pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. For further discussion of these and additional risks associated with an investment in the Funds please read the respective Fund Prospectus before investing.

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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USO002145 Ex. 4/30/2020