Commodities: WTI drops amid rising US dollar, American crude exports

Commodities were slightly weaker at the end of the week, with traders pushing West Texas Intermediate crude oil futures lower on the back of a stronger US dollar and rising US oil output.

That was despite what analysts termed a "solid" reading on the US jobs market and better-than-expected figures on factory sector activity in the States for May, together with fairly positive results in the widely-followed Caixin manufacturing sector survey for that same month.

Indeed, just the day before the Department of Energy had reported another increase in domestic US oil output for the week ending on 25 May, which had contributed to a bounce in the country's oil exports.

In its weekly petroleum status report, the Energy Information Administration, the DoE's statistical arm, reported a 44,000 barrel per day increase in domestic US oil output to 10.769m b/d, while exports had risen by 431,000 b/d to 2.179m b/d.

Thus, as of 2023 BST, WTI futures were slipping 1.70% to $65.90 a barrel on NYMEX, alongside a 1.26% drop in similarly-dated heating oil futures to $2.1768 a gallon.

From a bird's eye view meanwhile, the US dollar spot index was edging higher by 0.24% to 94.2090, which in turn was responsible for dragging the Bloomberg commodity index 0.29% lower to 90.45 points.

Those economic reports did however make themselves felt in the base metals space, with three-month LME copper futures rising to $6,896 per metric tonne, versus a Thursday close of $6,849.

Most base metals contracts ended higher on Friday, save zinc.

To take note of, gains in nickel caught the attention of SP Angel, with analysts at the broker pointing out how the most-traded futures on the Shanghai Futures Exchange had clocked in a with a weekly advance of roughly 6% - the biggest gain over a five-day stretch since 26 January.

In the background, overnight US President Donald Trump told Canada that the US "will agree to a fair deal, or there will be no deal at all".

Outside of cocoa and cotton, the main agricultural futures were mostly weaker.

Boosting cotton #2 ICE-traded cocoa were concerns that sub-tropical storm Alberto might cut production from the southern plains region.

In more general terms, Alberto was a reminder that Friday marked the start of the 2018 Atlantic hurricane season.