Commodity ETFs were mixed on the day, with energy-focused funds leading performance. Oil-related ETFs rallied sharply following the recent surge in crude prices, with the United States Oil Fund (USO) gaining 5.0%, the leveraged ProShares Ultra Bloomberg Crude Oil Fund (UCO) rising 5.1%, and the Invesco DB Oil Fund (DBO) advancing 3.2%. Energy equity ETFs also moved higher, including the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), up 2.4%, and the iShares U.S. Oil & Gas Exploration & Production ETF (IEO), up 2.3%. Natural gas exposure was weaker, however, as the United States Natural Gas Fund (UNG) fell 3.3% amid softer gas prices.
Industrial metals ETFs posted broadly positive returns, reflecting strength in copper and other base metals. The United States Copper Index Fund (CPER) gained 2.8%, while the Invesco DB Base Metals Fund (DBB) rose 1.7% and the ZSB Metals ETF added 1.1%. Mining-focused industrial metals funds also participated in the advance, with the Global X Copper Miners ETF (COPX) up 2.2%, the SPDR S&P Metals & Mining ETF (XME) gaining 1.8%, and the iShares MSCI Global Metals & Mining Producers ETF (PICK) rising 1.3%. Battery metals exposure was weaker, with the Global X Lithium & Battery Tech ETF (LIT) declining 1.2%.
Precious metals ETFs lagged, despite strength in underlying metal prices. Gold-backed funds declined across the board, with SPDR Gold Shares (GLD) down 1.4%, iShares Gold Trust (IAU) falling 1.4%, and VanEck Merk Gold Trust (OUNZ) losing 1.4%. Silver funds were also lower, with the iShares Silver Trust (SLV) and Aberdeen Physical Silver Shares (SIVR) both down roughly 1.0%. Precious metals equity ETFs underperformed the bullion funds, as the VanEck Gold Miners ETF (GDX) fell 3.1%, the VanEck Junior Gold Miners ETF (GDXJ) dropped 3.6%, and the Sprott Gold Miners ETF (SGDM) lost 3.1%.
Among leveraged and inverse commodity products, performance reflected continued volatility in energy markets. The leveraged crude oil fund UCO gained 5.1%, while the inverse crude oil fund SCO declined 5.1%. In natural gas, the leveraged BOIL ETF fell 6.4% while the inverse KOLD ETF rose 6.6%, making them the largest movers within the commodity ETF universe for the day. Overall, the session was characterized by strength in oil and industrial metals exposure, offset by weakness across precious metals and gold mining funds.
20260602_ETF_Commod_Daily_Returns_Flows
Metals and mining markets are poised for a weaker open this morning, with S&P 500 futures down 0.2% and Dow futures off 0.4% following yesterday’s gains. Precious metals are outperforming, led by gold, which is up 1.2% as declining oil prices have eased concerns about inflation and the potential for higher interest rates. Silver is also stronger, rising nearly 2%, while copper continues its recent momentum with a 1.4% gain, bringing its year-to-date advance to almost 17%. Base metals are broadly higher as well, with aluminum, nickel, and zinc posting modest gains.
On the policy front, President Trump signed a proclamation amending Section 232 national security tariffs on certain aluminum, steel, and copper imports, a development that could have implications for North American metal producers and consumers. Meanwhile, in China, state-backed iron ore buyer China Mineral Resources Group (CMRG) has reportedly directed some steel mills to scrutinize Fortescue’s new low-grade iron ore product as negotiations over a long-term supply agreement face challenges, highlighting ongoing tensions in the seaborne iron ore market.
Mining equities are indicated higher in pre-market trading, supported by stronger commodity prices. Freeport-McMoRan (FCX) is up 1.0%, Barrick Mining (B) is gaining 1.2%, and Newmont (NEM) is higher by 1.0%. The U.S. dollar is weaker, down 0.1%, providing an additional tailwind for metals prices, while the CBOE Volatility Index (VIX) has fallen 1.2% to 17.86, suggesting a relatively stable risk environment despite softer equity futures.
Energy markets are consolidating after Monday’s sharp rally, with WTI and Brent crude both down approximately 1.2% in pre-market trading. The pullback follows gains of 5.5% and 4.2%, respectively, that were fueled by escalating geopolitical tensions involving the U.S., Iraq, Iran, and Israel. Sentiment improved after President Trump indicated that talks with Iran have resumed and expressed optimism that a deal could be reached within a week. Markets are also closely monitoring developments in Lebanon following reports of a tense call between Trump and Israeli Prime Minister Netanyahu, while signs of reduced threats to shipping in the region have somewhat eased concerns over potential disruptions to global oil supplies.
Despite today’s weakness, underlying oil market fundamentals remain supportive. The International Energy Agency warned that global oil inventories could fall to critically low levels ahead of peak summer demand if current stockpile draws continue. Supply concerns were reinforced overnight by Ukraine’s continued attacks on Russian refining infrastructure, including a strike that reportedly sparked a fire at the 135,000 bpd Ilsky refinery in southern Russia. Meanwhile, China’s state planner is reportedly allowing some independent refiners to reduce output, while Asian demand for U.S. crude remains robust, with Kpler data showing record or near-record import volumes. In North America, Western Canadian Select’s discount to WTI has narrowed meaningfully to $12.50 per barrel from $15.30 in mid-May, reflecting improving market conditions for Canadian producers. Investors are also looking ahead to this afternoon’s API inventory data and Wednesday’s DOE report, with consensus expectations calling for draws across crude, gasoline, and distillate inventories.
Natural gas is modestly higher, gaining 0.8% to $3.203/MMBtu after falling 3.4% on Monday. Prices are finding support from forecasts calling for above-normal temperatures across the Lower 48 states next week, which could boost cooling demand. Market participants are also preparing for Thursday’s EIA storage report, where inventories are expected to increase by 106 Bcf, slightly above the five-year average build of 101 Bcf. Internationally, weaker LNG demand remains a headwind, with European LNG imports down more than 8% year-over-year in May, while Dutch TTF natural gas prices are retreating 2.8% after a strong gain in the previous session.
Metals & Mining Pre Market
- Synopsis:
- Daily update: Following yesterday’s higher close, futures signal a lower start again this morning with the S&P (0.2%) and the Dow (0.4%) thus far in the pre-market.
- Gold prices are trading higher as weaker oil prices eased fears of higher inflation and elevated interest rates.
- US President Donald Trump on Monday signed a proclamation amending his Section 232 national security tariffs on some aluminum, steeland copper imports, the White House said.
- China’s State-backed iron-ore buyer China Mineral Resources Group (CMRG) has instructed some steel mills to ask questions about Fortescue’s new low-grade product as negotiations over a long-term supply contract hit a rough patch.
- Pre-Market: FCX +1.0%, B +1.2%, NEM +1.0%
- Metals Snapshot:
- Gold +1.16% to $4558.4/oz, Monthly (1.85)%, YTD +5.01%:
- Silver +1.97% to $76.735/oz, Monthly +0.4%, YTD +8.69%:
- Copper +1.37% to $6.6425/lb, Monthly +11%, YTD +16.9%:
- Aluminum +0.69% to $3795.5/mt, Monthly +0%, YTD +0%:
- Nickel +0.93% to $19050/mt, Monthly +0%, YTD +0%:
- Zinc +0.17% to $3555/mt, Monthly +0%, YTD +0%:
- VanEck Gold Miners ETF +0% to $86.68, Monthly (0.49)%, YTD +1.06%:
- VanEck Junior Gold Miners ETF +0% to $114.95, Monthly (0.37)%, YTD +1.03%:
- US Dollar (0.13)% to $99.075, Monthly +0.94%, YTD +0.77%:
- CBOE Volatility Index (1.16)% to $17.86, Monthly (9.31)%, YTD +8.03%:
Energy Pre-Market
- Oil & Gas:
- Pricing
- WTI (1.2%) to $91.04 (July)
- Brent (1.2%) to $93.83 (Aug)
- Natural gas +0.8% to $3.203 (July)
- RBOB (0.8%) to $3.060 (July)
- ULSD (1.1%) to $3.601 (July)
- Oil: WTI and Brent trade down over (1.2%) following gains of +5.5% and +4.2% respectively on Monday that were driven by the U.S. and Iraq conducting military strikes against each other and Iran’s threat to walk away from peace talks. The slight decline today coming after Trump Monday afternoon said talks with Iran had resumed. Trump told ABC News last night he expects a deal within a week. The market is monitoring events in Lebanon today after Trump held what Axios reported was a heated call with PM Netanyahu and said the shooting there will stop (Israel’s pledge to push further into Lebanon was a catalyst for Iran threatening to walk from talks yesterday). Kpler is reporting several vessel owners are saying they are no longer receiving IRGC threats via radio transmissions, which was not the case a few weeks back. Ukraine’s targeting of Russian refineries continued overnight with an attack on the 135K bpd IIsly plant in the southern Krasnodar region. Local officials said the attack sparked a fire at the facility. The IEA today said global oil inventories could fall to critically or historically low levels just ahead of peak demand if draws continue at their current pace. Reuters sources said China’s State Planner will allow some independent refiners to cut output from June. Some of those plants had recently been told they could not cut output to below 80% of last year’s monthly average. Kpler had Asia May imports of U.S. crude at 63.56 million barrels, the most for a single month although the 2.05M bpd average was slightly behind the 2.07M bpd record from June 2023, according to data compiled by commodity analysts Kpler. Kpler has June and July imports from the U.S. tracking at 2.32M bpd and 3.07M bpd respectively. India fuel exports hit multi-year lows last month and were off (31%) y/y as that nation prioritizes domestic demand. The Alberta wildfire count stands at 25 this morning, but only 1 is deemed out of control while none currently threaten energy infrastructure. API data is due this afternoon ahead of the DOE Weekly Petroleum Status Report tomorrow with consensus expecting draws of crude, gasoline, and distillate stockpiles
- China May crude imports: Vortexa puts the import number at 7.0M to 7.5M bpd while Kpler has the number at a >9-year low of 6.451M bpd. Reuters.
- Asia May arrivals: Asia’s seaborne crude arrivals in May were 19.47M bpd, up from 18.7M bpd in April, which was the lowest in more than 10 years, according to Kpler data. May’s arrivals were down (22%) from the 3-month average prior to the war. Reuters.
- WCS discount narrows: WCS for July delivery to Hardisty, Alberta was trading at a $12.50/bbl discount to WTI Monday, down from a $15.30/bbl discount mid-May according to CalRock .
- Natural gas is up +0.8% to $3.203 following a (3.4%) pullback on Monday on stronger production and weaker LNG demand. Updated forecasts overnight continue to expect above-normal temperatures for the entire L48 next week. EIA storage data for week-ended 29-May is due Thursday with consensus expecting a build of +106 Bcf which compares to the 5-year average of +101 Bcf. European May imports of LNG were down over (8.0%) y/y according to CERA. TTF is down (2.8%) following a gain of over +5.0% Monday.
- Pricing
