Crude has seen three percent decline in the overnight market and it has impacted the Indian prices as well.
The US weekly inventory numbers, which have seen a 6.8 million barrel of jump last week, the production has increased as well and that seems to be weighing in.
However, the metal space has been down and further selling is what is seen there. It has been stretched on the weaker side. If you look at the last one month’s China data, it has been on the weaker side.
The only one positive that is there right now is that Beijing has agreed to send delegation to Washington in late August and there is some trade talk that they are initiating there.
David Lennox of Fat Prophets said, “If you have a look at the trading that we have seen for the commodity space, it has all been unfortunately in the red. Primarily, the drive for that are two things. First is the US dollar. We have seen the US dollar continue to rise through the course of the last few trading days, now up into the 96 region is the dollar index and that could push high as we continue to see the trade wars unwinding through at the broader economies."
"The other factor is that as these trade wars start to entrench themselves. We are starting to now see concerns about the impact that they are going to have on global growth. We did get a taste of that some months ago when the IMF suggested that we would see a lower global growth because of these wars. But now they are starting to actually entrench themselves and the markets are starting to concern themselves that with that lower demand, we are going to see lower demand for commodities and unfortunately commodity prices have had only one way to go”, Lennox further added.