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Weekly Commodities ETF Report: Crude, Gold End Week Lower as Coronavirus Worries Continue; Wheat Hits Biggest Weekly Gain in Nine Months

(MT Newswires) – Crude oil prices slumped on Friday, extending declines this month to more than 50%, after Russia reportedly turned down US President Donald Trump’s offer to help resolve a price war with Saudi Arabia. Shrugging off the verbal intervention by President Trump, Russia views “Saudi Arabia’s behavior as ‘blackmail’ and refuses to yield to it,” according to a research note put out by Commerzbank on Friday. “As yet, there is no sign of any movement on the part of Saudi Arabia and Russia,” Commerzbank analysts led by Daniel Briesemann wrote in the note. “The oil market remains characterized by extreme volatility.”

Oil was also lower due in part to an increase in restrictions on movement and activities of people in Europe and the US, with Gov. Andrew Cuomo ordering all non-essential New York workers to stay at home. British Prime Minister Boris John also set out on Friday lockdown measures in London by telling cafes, pubs, and restaurants to close to avoid further spread of the COVID-19 pandemic, a principal source of the fall in demand for oil.

Meanwhile, a report from the Wall Street Journal on Thursday said that Texas regulators were considering curtailing oil production in America’s largest oil-producing state. Several oil executives are said to have reached out to members of the Texas Railroad Commission, which regulates the industry, requesting relief following the oil-price crash. Russia also is reportedly in favor of such a move before it agrees to re-join Saudi Arabia in slowing crude production. Previously, Russia had shown reluctance in supporting a plan by the Organization of the Petroleum Exporting Countries (OPEC) to remove an additional 1.5 million barrels per day from a joint output between OPEC members and other oil-producing countries.

On Wednesday, the US Energy Information Administration (EIA) said that crude inventories surged by two million barrels over a week to March 13. According to a Reuters poll, analysts have forecast an increase of 3.3 million barrels. Separately, data compiled by Baker Hughes (BKR) released Friday showed that the US oil rig count slumped by 19 to 664 over the week ended March 20, the lowest level since Jan. 10. The combined count for the US sank by 20 to 772 as gas rigs dropped by one to 106.

Light, sweet crude oil fell 35.98% for the week, settling at $25.22 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 31.18% over the five-day period and settled at $0.66 per gallon on Friday. Natural gas ended the week down 13.36%, settling at $1.65 per 1 million British thermal unit at the end of Friday’s session.

The SummerHaven Dynamic Commodity Total Return Index (SDCITR) fell 0.21% this week, compared with a decrease of 7.16% in the prior week.

Gold prices ended higher on Friday but failed to hold the $1,500 mark, with a settlement price of $1,479.30; it closed the week down 2.57% even as US equities weakened and the US dollar dropped. While the price of the precious metal has retreated from the 2020 high of $1,676.70 per ounce touched in late February, gold has not suffered the same losses seen for stocks and other commodities during the coronavirus pandemic.

Copper was lower on Friday, with a settlement price of $2.19, and fell 14.42% for the week, after reaching the lowest level since January 2016 on Thursday. Considered a gauge of the world’s economy due to its various end-uses in both construction and consumer products, the red metal has been under the scrutiny of analysts, especially with the impact of the coronavirus outbreak affecting major copper consumers such as China and the US. Analysts at Citi slashed their three-month price forecast for the red metal to $5,000 per metric ton. Goldman Sachs also cut its copper forecast to $4,900 per metric ton, from $5,900, for the next three months.

In agricultural commodities, wheat futures ended this week up 6.87% — the largest weekly gain in the last nine months — and closed the Friday session at a price of $5.39 per bushel, as some traders are optimistic that demand will improve as consumption of wheat-based products increases during the coronavirus pandemic; others are more cautious since this scenario is still based on speculation, and not on real-world experience.

In other commodities, soybeans closed higher at $8.63 a bushel on Friday’s and was 0.67% higher for the week. Corn closed at $3.44 a bushel, up 6.1% for the five-day period.  Sugar was up 11 cents per pound on Friday but down 6.68% for the week; coffee was up at $1.20 per pound for the day Friday and climbed 12.3% on the week, while cocoa settled at a price of $2,230 per tonne on Friday, up 8.58% for the week.

Copyright © 2020 MT Newswires, www.mtnewswires.com.

 

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

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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.

Performance is historical and does not guarantee future results; current performance may be lower or higher. Investment returns/principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Most recent performance is available at www.uscfinvestments.com.

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USO002152 Ex. 5/31/2020