Brent Crude Gains 4.2 Percent in August, WTI Ends Month Up 3.1 Percent

U.S. commodities markets finished mixed on Friday in relatively low volume sessions ahead of the long U.S. Labor Day holiday week-end. U.S. exchanges are closed on Monday. Some of the price action was dictated by the movement in the U.S. Dollar, which was manipulated by concerns over U.S.-Global trade disputes.

After cutting a new deal with Mexico on Monday, the U.S. created a stir on Friday with intense negotiations with Canada that ended with no deal being reached. Bloomberg News reported on Thursday that President Trump is considering following through on additional tariffs on China. Trump also expressed dissatisfaction with a concession from the European Union.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil bulls took a breather on Friday after rallying more than $7.00 per barrel since August 16. Concerns over the impact of a global trade war put pressure on prices. However, losses were limited by worries over impending U.S. sanctions on Iran and falling Venezuelan output.

Despite Friday’s losses, WTI and Brent crude rose about 2 percent for the week and finished August with gains of 3.11 percent and 4.19 percent respectively.

Helping to support prices was a report that showed the volume of unsold crude stored in the Atlantic basin has dwindled from around 30 cargoes to just a handful in recent weeks, according to Reuters.

Bullish traders were further aided by a sharp drop in Venezuelan supply and predictions that Iranian supply will be cut sharply once the U.S. sanctions start in November. There is evidence that buyers are already cutting back on Iranian oil.

Bearish traders are hoping for the trade wars to escalate. They are banking on rising trade barriers between the U.S. and several major nations to be a drag on global growth.

In other news, speculators raised their bullish bets on crude for the first time in more than a month, U.S. Commodity Futures Trading Commission data showed on Friday.

Additionally, the U.S. rig count, an indicator of future production, rose for the first time in 3 weeks, energy services firm Baker Hughes reported.

Gold

December Comex Gold futures finished slightly better on Friday as investors tried to make sense of the on-going trade disputes. Gold was pressured by a stronger U.S. Dollar, which was driven higher by strong safe-haven demand. However, due to low volume ahead of the long U.S. holiday week-end, sellers lacked the drive to turn prices lower for the session. Nonetheless, the market still finished 0.54% lower for the week. Additionally, gold was down 1.6 percent in August, with losses this year totaling more than 7 percent.