Nat Gas Spikes Higher on Weather Concerns

The major commodity markets finished mixed on Tuesday as investors prepared for today’s release of the Fed minutes, which could have an impact on demand for dollar-denominated commodities such as copper, gold and crude oil.

Copper

Copper prices rose to their highest level since April 26 on Tuesday as investors continued to react to an easing of trade tensions between the United States and China. However, late in the session, prices retreated after U.S. President Donald Trump said he was not pleased with recent trade talks between the United States and China.

July Comex High Grade Copper settled at $3.1320, up 0.0335 or +1.07%.

The shifting of the sentiment over U.S.-China relations is likely to lead to increased volatility in the copper market at a time when some investors believe prices should move higher due to expectations of increased demand and a possible supply shortage.

Gold

Gold prices rose on Tuesday in reaction to a weaker U.S. Dollar and rising uncertainty over the future of U.S.-China trade relations. Short-sellers also took profits after a recent plunge in prices ahead of Wednesday’s release of the minutes from the May U.S. Federal Reserve Monetary Policy Committee meeting.

June Comex Gold futures settled at $1292.00, up $1.10 or +0.09%.

Traders will be looking for clues in the minutes on the outlook for U.S. interest rates. A hawkish interpretation of the minutes could send interest rates and the U.S. Dollar higher, while putting pressure on dollar-denominated gold.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil settled mixed on Tuesday with U.S. crude posting a loss and Brent closing higher.

July WTI crude oil futures settled at $72.20, down $0.15 or -0.21% and Brent finished at $79.57, up $0.35 or +0.44%.

The markets were supported early in the session by concerns over possible supply disruptions due to new sanctions against economically-crippled Venezuela and looming sanctions against Iran. Prices started to weaken late in the session on worries that OPEC may begin increasing output as soon as June and after Washington raised concerns the oil rally was going too far.

Natural Gas

Natural gas soared on Tuesday after revised National Weather Service forecasts showed above-average temperatures holding over most of the country through both the six-to-10-day and eight-to-14-day periods. Warmer weather should boost demand, which would curtail the pace of weekly injections, meaning the current supply deficit may not be filled in time for the start of the summer cooling season.