Commodities Decline as U.S. Crude Inventories ClimbMark Shenk
Commodities dropped for a second day, led by metals, energy and cotton, amid signs of an economic slowdown in China and after a government report showed American crude supplies surged to a record.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell as much as 2.6 percent to 608.08. It traded at 611.06 at 4 p.m. in New York. The GSCI touched 596.36 on April 18, the lowest level since July 2. Silver, gasoline and copper tumbled more than 3 percent each, while West Texas Intermediate crude and Brent oil decreased more than 2 percent.
Commodities measured by the S&P GSCI declined after Chinese manufacturing grew at a weaker pace in April. U.S. companies added fewer workers than forecast in an ADP Research Institute report. The U.S. Labor Department will publish April payrolls data May 3. The selloff accelerated as the government reported that U.S. crude supplies rose to 395.3 million barrels in the seven days to April 26, the most in weekly data going back to 1982. They were last at this level in 1931 using monthly data.
“The data is building a very negative picture for commodities,” said John Kilduff, a partner at Again Capital LLC, a New York energy hedge fund. “First there were the Chinese figures overnight that show a slowdown and the ADP numbers, which are a warning shot about what Friday’s jobs report will show. The large build in crude-oil inventories broke the back of the recent commodity rally.”
West Texas Intermediate crude for June delivery decreased $2.43, or 2.6 percent, to settle at $91.03 a barrel on the New York Mercantile Exchange. It was the lowest closing price since April 23 and the biggest decline since April 15. Brent oil for June settlement dropped $2.42, or 2.4 percent, to end the session at $99.95 a barrel on the London-based ICE Futures Europe exchange.
Crude stockpiles rose 6.7 million barrels last week, the biggest gain since September, the U.S. Energy Information Administration, the Energy Department’s statistical arm, reported today. A 1.1 million-barrel supply increase was forecast, according to the median of 11 analyst responses in a Bloomberg survey.
“We were looking for WTI to possibly test $98-or-$100 until these builds,” Kilduff said. “The $90 level is now in jeopardy and we could soon be trading in the low $80s.”
Gasoline for June delivery slipped 8.27 cents, or 3 percent, to settle at $2.7193 a gallon on the Nymex. It was the biggest decline since April 3. Ultra-low-sulfur diesel for June delivery dropped 5.07 cents, or 1.8 percent, to end the session at $2.7889 a gallon in New York.
Silver futures for July delivery fell 3.5 percent to $23.343 an ounce on the Comex in New York. Prices slumped 15 percent last month, the most since December 2011.
Gold for June delivery retreated 1.8 percent to $1,446.20 an ounce on the Comex, the biggest drop since April 15, when prices slumped the most in 33 years.
Copper futures for delivery in July declined 3.4 percent to settle at $3.08 a pound on the Comex. On the London Metal Exchange, copper for delivery in three months lost 3.7 percent to settle at $6,795 a metric ton ($3.08 a pound), the biggest drop since April 10, 2012. The metal has decreased 14 percent this year.
Aluminum, lead, nickel, tin and zinc also declined in London. Tin settled at $19,975 a ton, down 20 percent from a January closing high, meeting the common definition of a bear market. Nickel fell to $14,825 a ton, or 21 percent below its closing high on Oct. 1.
Cotton futures for July delivery dropped 4.1 percent to close at 83.87 cents a pound on ICE Futures U.S. in New York. Raw-sugar futures for July delivery declined 1.5 percent to settle at 17.33 cents a pound.
Soybean futures for July delivery dropped 1.9 percent to settle at $13.73 a bushel on the Chicago Board of Trade. July-delivery corn declined 0.5 percent to $6.4675 a bushel and wheat slid 1.4 percent to $7.21 a bushel.