Oil prices continued to gush higher this week on news that U.S. inventories of crude oil are falling.
While the U.S. is still awash in crude oil, domestic stockpiles have fallen for five weeks straight, pushing prices over $50 per barrel for the first time in almost four months.
Prices have been rising after OPEC announced last week that it was planning to reduce oil production, which would be the cartel's first cutback in over eight years.
Even if OPEC follows through on the plan, the global oil glut will likely persist, especially if prices remain near $50 per barrel. At that price, many American oil producers can profitably drill, allowing them to increase production, essentially defeating OPEC's goal of reducing supply.
Metals melt lower
Gold and silver tumbled this week after investors took profits on long-held positions. Both metals were up by more than 20 percent so far this year, prompting a quick bout of liquidation that hammered prices to a three-month low.
Traders sold the metals as they grew increasingly confident that a strong U.S. economy would prompt the Federal Reserve to raise interest rates in the near future, a move that could diminish demand for gold and silver.
For some, Friday's price of $17.40 per ounce for silver and $1,255 per ounce for gold present a welcome discount, while others view the break as the beginning of a larger correction.
Brexit fears pound Britain
The British pound collapsed to a 31-year low on Friday amidst growing fears about the British exit from the European Union.
Once out of the EU, Great Britain will need to renegotiate deals with the EU and other nations about a variety of policies, including trade and immigration. Recent commentary from other EU leaders, especially France's Francois Hollande, suggested that they may strike a hard bargain with the British, which could damage the British economy in the long run.
These ongoing concerns have caused the pound to lose one-sixth of its value since the British voted to split from the EU four months ago, leaving the pound worth only $1.25 on Friday.
For non-currency traders, the ongoing collapse in the pound means that goods imported from Great Britain will be substantially cheaper, as will a trip to London.
Opinions are solely the writers'. Walt and Alex Breitinger are commodity futures brokers with Paragon Investments in Silver Lake, Kan. They can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.