(MT Newswires) – – Crude rallied higher despite some weakness earlier early last week, as the Organization of Petroleum Exporting Countries said it will try to increase global output by about 1% in coming months. The plan was adopted by OPEC’s 14 members, with Iran ending up agreeing to the plan hatched by its regional rival Saudi Arabia. The plan is set to be formally adopted Saturday in an OPEC meeting with non-OPEC countries in Vienna. Friday’s decision was taken in “the mutual interest of producing nations” and “the efficient, economic and secure supply to consumers,” OPEC said in a statement.
Over the last week, light, sweet crude oil for August delivery was up 7.90% and closed at $68.58 per barrel. In other energy futures, gasoline rose during the week, up 2.59% and settled at $2.05 per gallon at the close of Friday’s session. Meanwhile, natural gas fell 2.61% lower this week and was weaker in today’s session at $2.95 per 1 million British thermal unit.
The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) fell 0.05% last week, from a decline of 2.66% in the previous week.
Gold ended the Friday lower, settling at $1,270.70 to finish the week down 0.78%, weighed down by a stronger dollar. On Thursday, the yellow metal sank to six-month lows following Federal Reserve Chairman Jerome Powell’s comments that “the case for continued gradual increases in the federal funds rate is strong.” Overseas, the Bank of England decided to keep the key interest rate unchanged, in a split vote, and stood unanimous on quantitative easing. By Friday, IHS/Markit data signaled robust US economic growth for the second quarter. The IHS manufacturing index slipped to a seven-month low of 54.6 from 56.5. Any reading over 50 signals expansion. The flash PMI surveys add to evidence that the US economy is enjoying a strong second quarter. Despite growth cooling slightly in June, the latest numbers round off the best quarter for three years. Meanwhile, copper settled at $3.05 at the end of Friday’s session, and was down 3.41% for the week — near three week lows. Prices continued to be weighed by concerns over a possible trade war between the US and China, which could affect the demand for metals in China, the world’s largest metal consumer. These fears have been amplified by recent developments, after US President Donald Trump on Thursday directed US Trade Representative Robert Lighthizer to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10%; and on Friday, Trump said he would impose new tariffs on automobiles from the European Union unless the EU removes tariffs and trade barriers placed on the United States.
Agriculture commodities were also being pressured by these trade war jitters, with soybeans for the fourth straight week trading in the red, sinking to near 10-year lows. Soybeans were down 1.21%, closing at $9.16 per bushel on Friday. Among other grains, corn was down 1.63% in the week and settled at $3.78 per bushel in Friday’s session but the outlook for the corn crop has become favorable following wet and warm weather for the so-called US Corn Belt. Rains have soaked fields in South Dakota, Minnesota and Iowa, with some areas suffering flooding. More storms are expected in the following week. Just last week, the US Department of Agriculture had given the corn crop and soybean crop their strongest ratings in recent decades: the US corn crop was given a 78% rating and the soybean crop, a 73% crop rating. Meanwhile, sugar had a weekly decline of 2.90% and settled at a price of $0.12 per ton on Friday; coffee was at $1.17 per pound at Friday’s close, with a weekly drop of 0.51%; and cocoa fell 0.44% for the week and closed Friday’s at $2,514.
The SummerHaven Dynamic Agriculture Index Total Return Index (SDAITR) fell 0.69% for the week, compared with a decline of 1.73% in the prior week.
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