Commodities: Increasing supply of oil weighs heavy on the market

An over supply of crude from Nigeria and Libya of approximately 1m barrels per day weighed heavily on the oil market on Friday with September contracts for both WTI crude and Brent crude down 2.28% and 2.29% respectively.

This is despite continued relative weakness in the US dollar with the dollar index currently trading at 93.93.

Sensitivity in the oil market is expected to be heightened next week with meetings due to be held between OPEC and Russia.

The weaker dollar added to golds shine with the precious metal managing to gain just shy of its typical $10 spot move from early morning trading to hit a daily high of $1,254 by 1800 BST.

Traders will no doubt be focused on the Federal Open Market Committee statement due on Wednesday 26 July for further clues on US fiscal and monetary policy and what that might mean for gold.

Continued weakness in the dollar also saw silver and platinum benefit with a move higher of 0.70% and 0.82% respectively. Spot silver saw a day low of $16.33 where it started the trading session, rallying to a high of $16.53 by 1300 BST and traded steady at $16.48 by 1700 BST.

Spot platinum saw similar moves, starting the day at a low of $927 rallying to a high of $941.40 by 1300 BST.

Copper hit a 4 1/2 month high today, gaining strength from a weaker dollar as well as strong growth in China. "Overall demand in China is not that bad at all," said Richard Fu, head of Asia and Pacific at LME Floor Member AMT, adding "In general global economic figures are improving, there's supply disruptions here and there, plus the Chinese want to cut metal production in order to tackle pollution and over-capacity."

The three month LME copper contract closed 0.8% higher at $6,004, the highest level since March this year.

On the agricultural front, September contracts for both corn and wheat were down 2.30% and 0.69% respectively. Corn closed session at $382 and wheat at $505.25