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Oil Flat on Independence Day as Traders Close Positions

July 4, 2017 at 16:46 by Andrew Moran

Oil futures are trading relatively flat as US markets are closed for the Fourth of July holiday. After eight days of solid gains, crude prices could potentially run out of momentum as traders close their positions for Independence Day.

August West Texas Intermediate (WTI) futures rose $0.04, or 0.08%, to $47.11 per barrel at 16:34 GMT on Tuesday on the New York Mercantile Exchange. US crude has been steadily recovering ever since hitting fresh lows last month.

Brent, the international benchmark for oil prices, is also trading in positive territory. September Brent crude futures climbed $0.02, or 0.04%, to $49.69 a barrel on London’s ICE Futures exchange. Brent crude prices have been gradually inching upwards and is on the cup of hitting the $50 threshold.

BMI Research recently put smiles on the faces of commodities traders when the organization provided a rosy outlook for oil prices in the second half of 2017.

We see a recovery for oil prices in H2 2017 from current levels, with OPEC production cuts, a slowdown in global supply growth and seasonally firming demand driving up prices.

Oil has been on a bullish run for the last several trading sessions. US crude fell as low as $43, but has been putting forward solid gains over data that US drillers decreased the number of oil rigs by two, which is the first reduction in 24 weeks. However, oil prices posted a monthly loss and their worst first half of a year in nearly 20 years, which is primarily due to the oversupply in the global crude market.

US oil producers have been ramping up their production levels with output expected to top 10 million barrels per day (bpd) sometimes this year or in 2018. Moreover, despite Organization of Petroleum Exporting Countries (OPEC) extending its production freeze of 1.8 million bpd for another nine months, Libya and Nigeria have been increasing their output because they are exempt from the agreement.

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