(MT Newswires) – -Crude ended in negative territory for the week — suffering its lowest finish since April, following reports of rising US production as well as the possibility that the Organization of the Petroleum Exporting Countries and its allies would taper production curbs, if not outright boost crude output to help offset output losses from Iran and Venezuela. On Wednesday, the Energy Information Administration reported that US crude supplies fell by 3.620 million barrels for the week ended May 25, confounding expectations for a draw of just 400,000 barrels. But, monthly data on Thursday showed that US crude production increased 2.1% to 10.474 million barrels a day in March, up from February. It was also up 14.6% from March 2017. Meanwhile, officials from Saudi Arabia had expressed their intent to step up production gradually while maintaining its quota agreement with OPEC. Earlier in the week, the organization has said it would maintain its output cuts. Finally, Baker Hughes’ (BHGE) rig count report showed the number of oil rigs operating in the US jumped by 2 to 861 — the third consecutive week of gains and near the highest level since mid March 2015.
Over the last five days, light, sweet crude oil for July delivery was down 2.71% and closed at $65.81 per barrel. In other energy futures, gasoline fell during the week, down 1.13% and settled at $2.14 per gallon at the close of Friday’s session. Meanwhile, natural gas edged 0.37% higher this week and was up in Friday’s session at $2.96 per 1 million British thermal unit.
The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) rose 0.45% this week, from a decline of 0.69% in the previous week.
Gold ended the Friday session lower, settling at $1,299.30; and finished the week 0.70% lower. In the first half of the week the yellow metal benefitted from its safe haven appeal, as concerns over developments in Italian politics, as well as more trade war fears, drove most traders away from equities. But equities took a higher turn on Friday, and gold slumped after Italian politicians agreed on a coalition government, averting the prospect of a snap election and ending the uncertainty in the eurozone’s third-largest economy. Back home, strong US jobs data also helped buoy stocks, with nonfarm payrolls rising ahead of expectations with a gain of 223,000 in May versus estimates for a 190,000 rise. The unemployment rate firmed at 3.8% versus estimates for 3.9% and also 3.9% for the previous month. Meanwhile, aluminum and copper made modest gains following President Donald Trump’s announcement of new US tariffs on imports of steel and aluminum from three of its biggest trade partners — Canada, Mexico and the European Union. The European Union said it will open a case with the World Trade Organization questioning the tariffs, while Canadian Prime Minister Justin Trudeau said Canada will also file a challenge to the levies with the WTO, calling the tariffs “illegal and counterproductive.” Copper rose 0.41% for the week and closed Friday’s session at $3.09 per pound; aluminum had a weekly rise of 1.37% and settled at $2,292 per ton.
Agriculture commodities ended the week mostly mixed, with grains trading mostly lower: corn was down 3.87% in the week and settled at $3.92 per bushel in Friday’s session; soybeans had a weekly decline of 1.70%, closing at $10.21 per bushel on Friday; and wheat was down 3.95% for the week and settled at $5.23 per bushel at the end of Friday’s session. Meanwhile, sugar had a weekly gain of 0.32% and settled at a price of $0.12 per ton on Friday; coffee was at $1.23 per pound at Friday’s close, with a weekly gain of 1.79%; and cocoa fell 4.03% for the week and closed Friday’s at $2,458. Cocoa prices slumped this week after the International Cocoa Organization lowered its global production estimates and boosted its demand forecasts for the 2017-2018 season, according to a report on MarketWatch. The organization said in its quarterly report that in 2017-18 cocoa supply will surpass demand by just 10,000 metric tons, a decline from the 105,000-ton surplus it forecast at the end of February. The ICC also said it projects production to be 4.587 million tons, a 3.3% annual drop.
The SummerHaven Dynamic Agriculture Index Total Return Index (SDAITR) rose 3.13% for the week, compared with an increase of 1.80% in the prior week.
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