Commodities: Crude lukewarm after after US rig-count rise initially hurts prices

Digital Look Sharecast | 19 Jun, 2017 16:14 - Updated: 16:14 | | |

BG Group Metro 1 drillship Tanzania oil & gas

Crude-oil futures are managing lukewarm gains on Monday afternoon, having bounced off earlier softness induced by the latest Baker Hughes rig-count data.

At 15:19 BST, Nymex-priced West Texas Intermediate crude was up 0.38% to $44.91 a barrel. Intercontinental Exchange-traded Brent rose 0.55% to $47.63 a barrel.

FXTM research analyst Lukman Otunuga said the earlier softness in crude came as the continued expansion in US shale was seen as obstructing Opec's efforts to stabilize the global glut.

"The tale of Opec versus US shale is starting to feel like an ongoing battle of attrition with the champion taking the spoils," added Otunuga.

"From a technical standpoint, WTI Crude remains in the bears' territory on the daily charts and a break below $44 should entice sellers to target $43."

To this, SwissQuote added that WTI was finding support at $43.76, but was expected to show further decline.

Turning to metals, on Comex, gold lost 0.55% to $1249.6 an ounce. Silver fell 0.76% to $16.54 an ounce. Copper was ahead 0.95% to 260.35 cents a pound.

Mike van Dulken and Henry Croft, both analysts at Accendo Markets, commented earlier on Monday that as the US dollar came off its highs, the precious yellow metal was subsequently off its worst level.

"FX movements could provide a significant break either side of the tight channel limits. Bulls will be looking for falling highs resistance at $1252.50 to give way," the pair said.

"Bears want to see anything below $1251 for fresh four-week lows." They also noted that the Baker Hughes Rig Count had notched up its 22nd consecutive weekly increase.

FXTM'S Otunuga also noted that gold bears were making again making a guest appearance on Monday as the dollar stabilised.

"The Fed hawks still have a grip on the zero-yielding metal with the prospect of higher US interest rates this year enforcing downside pressures," said Otunuga.

"If the Dollar continues to stabilize and Federal Reserve officials adopt a hawkish stance this week, Gold could be instore for further punishment."

On London Metals Exchange, three-month industrial metals were mostly ahead. Zinc rose 0.88%, tin added 0.72% and copper improved 0.04%, but aluminum slipped 0.27%.

More news

19:01 Europe close: Stocks edge slightly higher at the end of the session

Stocks pared early losses as traders digested a terrorist attack on Barcelona overnight and monitored the news-flow coming from the White House.

18:04 Weeky review

The FTSE 100 finished the week almost flat, up 14.02 points or 0.19%, at 7,323.98.

17:22 London close: Risk aversion grips FTSE, stocks lower on Trump and Barcelona attacks

London's FTSE 100 index fell below a key technical level as Friday's session wore on, with travel stocks leading the retreat after the terror attacks in Barcelona and the large cabal of overseas focused companies hit by the dollar's weakness amid renewed concerns about the US Presidency.

17:03 BowLeven appoints new director

AIM-listed oil and gas group, BowLeven announced on Friday that Matt McDonald would be appointed to the firm's board as non-executive director with immediate effect.

17:04 Week ahead: Not everything that happens at Jackson Hole stays there

In the coming week, the spotlight will be on the Federal Reserve bank of Kansas City's Symposium in Jackson Hole, Wyoming.

16:26 Acacia remains a 'buy' for HSBC but target price slashed

HSBC cut its target price for Acacia Mining by 47% but kept its 'buy' recommendation in place as the months-long spat with the Tanzanian government still hangs over the company.

16:10 US open: Stocks flat heading into the weekend, political ruckus weighs

Wall Street is essentially flat heading into the weekend after the head of the University of Michigan's consumer confidence survey said recent events in Charlottesville were likely to take their toll on sentiment.

15:18 FTSE 250 movers: Hikma still looking ill; Kaz Minerals buffs up

Hikma Pharmaceuticals shares continued their downward spiral as HSBC slashed their target price, telling clients its first half numbers contained lower guidance for generics and a tougher outlook for injectables and branded drugs.

14:56 Calpine agrees to be acquired for $5.6bn in cash

Shares of Calpine Corporation surged after news broke that the American power generation company had agreed to be acquired by a consortium led by Energy Capital Partners.

14:27 FTSE 100 movers: Airline shares down after Barcelona attack; Upgrade boost for Mondi, RSA

The Barcelona attack and disintegrating relationship between US President Donald Trump and the business community made for a very heavy splash of red among the Footsie on Friday.