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Commodities: Crude trots higher on continued curb-extension hopes ahead of API data

Commodities

Commodities: Crude trots higher on continued curb-extension hopes ahead of API data

Tue, 16 May 2017
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Commodities: Crude trots higher on continued curb-extension hopes ahead of API data

(ShareCast News) - Crude-oil futures continued to trot higher on continued hopes that Opec-led production curbs will last into 2018, but investors have a wary eye on two sets of US inventories data due out this week.
At 14:55 BST, Nymex-priced West Texas Intermediate crude was up 0.51% to $49.10 a barrel. Intercontinental Exchange-traded Brent was ahead 0.5% to $52.08 a barrel.

"Investors will be keenly watching tonight's (industry) API inventory data for any indication of a continued decline in US inventories (last week)," said analysts Mike van Dulken and Henry Croft at Accendo Markets.

The American Petroleum Institute data on US stores of the precious black liquid would be followed on Wednesday by those from the government's Energy Information Administration.

They would also be listening out for further production-cut extension pledges from other Opec members to inspire further bullishness, the pair added.

A wave of optimism swept through the oil market on Monday as Saudi Arabia and Russia said supply cuts needed to last into 2018, but not all pundits are convinced.

The supply cuts should be extended for some nine months, said energy ministers from the two countries, meaning they would last until March 2018.

Opec, Russia and other oil producers had previously agreed to lower production by 1.8m barrels a day in the first half of 2017, with scope to extend that by six months.

SwissQuote market strategist Yann Quelenn said crude crude was continuing to bounce on a short-squeeze move.

"We consider that further weakness are very likely," said Quelenn.

Meanwhile, on Comex, gold was up 0.36% to $1234.4 an ounce. Silver rose 0.61% to $16.71 an ounce, and copper gained 0.3% to 254.65 cents a pound.

"Gold seems on its way back up. Hourly support is now located at $1195. Expected to show further upside pressures," said Quelenn.

"In the long-term, the technical structure suggests that there is a growing upside momentum. A break of $1392 is necessary to confirm it."

Van Dulken and Croft added that the safe-haven yellow metal was trying to regain yesterday's highs, and resume last week's bounce from 2017 rising support.

"Now safely above the 200-day moving average at $1230, assisted by USD weakness and questionable US data before a likely Fed rate hike next month, might $1250 be on the cards?"

On the London Metals Exchange, three-month industrial metals were ahead. Copper rose 0.96%, aluminum added 0.77%, zinc rose 0.67% and tin added 0.15%.

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