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

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

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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%.

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