Commodities: Oil futures lower on dollar strength, rising rig count

Uncertainty ahead of the EU referendum and next week’s Federal Reserve policy meeting bolstered demand for US dollars, in turning sapping the strength of the commodities complex.

Front month West Texas Intermediate crude oil futures gave back 2.95% to $49.07 a barrel, as traders sold out, pressured by strength in the US dollar and data showing a second consecutive weekly increase in the number of US oil rigs in operation.

The number of active oil rigs in the US rose by three to a total of 328 during the week ending on 10 June, according to data from Baker Hughes, which was still nevertheless far below the 635 observed during the same week one year ago.

Other energy contracts saw similar weakness, with July 2016 NYMEX-traded heating oil down by 2.27% to $1.5160/gallon and RBOB gasoline losing 3.65% to $1.5596 per gallon.

Precious metals were one of the few areas of the market to see any gains, on safe haven demand.

August 2016 gold futures on COMEX edged higher by 0.25% to $1,275.90/oz. while July 2016 silver was flat at $17.33/oz. by the closing bell.

Spot platinum was the exception, losing 1.14% to $991.65/oz..

Also in COMEX trading, July copper futures finished the session lower by 0.42% to $2.0305/lb..

It was mostly a day of losses for soft commodities as well, with July wheat futures on the Chicago Board of Trade faring worst, ending the session down by 2.99% to $4.95 per bushel.

September Cocoa on the ICE on the other hand managed to close higher, ending the day up by 0.16% to $3,099 per metric tonne.

In terms of the big picture, Bloomberg’s commodity index closed the day down by 1.04% at 88.94, alongside a 0.66% jump in the US dollar spot index to reach 94.57.