Oil prices moved higher on Friday, with U.S. crude on track for weekly gains of 1%, as investors looked ahead to further data on U.S. drilling activity
CRUDE OIL – Oil prices moved higher on Friday, with U.S. crude on track for weekly gains of 1%, as investors looked ahead to further data on U.S. drilling activity later in the session and waited for a gathering of oil producers at the beginning of next week. Despite this week’s gains, oil has tumbled more than 10% year-to-date as skepticism over the capability to reduce the global supply cut caused investors to sell off black gold. The Organization of Petroleum Exporting Countries (OPEC) agreed with non-OPEC members led by Russia to cut production by 1.8 million barrels per day through March 2018 though the latest reading on compliance by OPEC members was at just 78%. Furthermore, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, and a relentless increase in U.S. shale oil output. Earlier this week, tiny producer Ecuador signaled it might not abide by the cuts, causing fears that other larger producers might follow suit. OPEC and non-OPEC producers are scheduled to meet Monday in Russia and traders are watching for any signs that Saudi Arabia, the largest producers of crude in the world, may cut its output.
GOLD- Gold prices showed slight gains in overnight trade on Friday, hitting its highest level this month, concerns over investigations into U.S. President Donald Trump’s alleged ties with Russia drove investors into the safe haven asset. A weak dollar usually supports gold prices, as it bolsters the metal’s appeal as an alternative asset and makes dollar-priced commodities more attractive to holders of other currencies. Gold was also supported this week as both the European and Japanese central banks announced that they would continue their accommodative monetary policy. Barring further political developments stateside, Friday was expected to be a quiet day for the precious metal as no major economic reports were scheduled for release. The Republican Party’s incapacity to achieve a replacement healthcare plan and headlines revolving around multiple congressional and federal investigations into possible ties between Trump and Russia during the 2016 presidential campaign have recently put pressure on the dollar.
COPPER – Copper inventories in Shanghai bonded zone dropped on a weekly basis during July 17-21, SMM learns. Spot Copper Concentrate TCs Stabilize as Smelters Hold Sufficient Raw Materials, SMM Reports
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