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Commodities Recap For The Week Of Dec. 7, 2018


  • A bullish week for commodities.
  • The dollar edges lower.
  • Gold over $1250 with silver moving towards the top end of its trading range.
  • Crude oil and oil products rally as OPEC cuts production by 1.2 million barrels per day.
  • The stock market falls and digital currency values continue to evaporate.
  • Looking for more? I update all of my investing ideas and strategies to members of Hecht Commodity Report. Get started today »

The Story of This Week: The Triad Replaces OPEC

It was a busy week in the oil patch. The week started with news that Qatar is leaving OPEC to concentrate on their natural gas business. However, the ongoing blockade of the tiny and wealthy nation likely contributed to their decision. After all, discussing energy policy with the Saudis who initiated the blockade has been more than distasteful for the Qataris. UCO and SCO are the double-leveraged crude oil trading products that replicate twice the daily trading performance of WTI futures that trade on the NYMEX division of the CME. In the current environment of high volatility in the crude oil market, these products provide market participants with turbocharged performance on a short-term basis.

On Thursday, December 6 the oil ministers of OPEC could not come to any consensus over output cuts. The market had expected a 1.4 million barrel per day decline in output, but KSA lobbied for only one million barrels. The oil ministers decided to turn to the Russians for guidance and support. The Russian oil minister Alexander Novack worked with Vladimir Putin to come up with a solution. Meanwhile, U.S. President Donald Trump continued to pressure the Saudis and other allies in the cartel to leave production unchanged.

OPEC's influence in the oil market has declined appreciably over recent years. If it were not for the Russians and Vladimir Putin, they would have had lots of trouble digging their way out of the situation when the price of the energy commodity fell to a low at $26.05 per barrel in early 2016. This week, the ministers turned to the Russians once again. The three leading producers of oil in the world are the United States, the Russians, and Saudi Arabia. The triad now controls the global oil market, and other OPEC members have become little more than

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This article was written by

Andrew Hecht profile picture
Weekly commodities commentary and calls, from a Wall Street veteran
Andy Hecht is a sought-after commodity and futures trader, an options expert and analyst. He is the #2 ranked author on Seeking Alpha in both the commodities and precious metals categories. He is also the author of the weekly Hecht Commodity Report on Marketplace - the most comprehensive, deep-dive commodities report available on Seeking Alpha.

Andy spent nearly 35 years on Wall Street, including two decades on the trading desk of Phillip Brothers, which became Salomon Brothers and ultimately part of Citigroup.

Over the past two decades, he has researched, structured and executed some of the largest trades ever made, involving massive quantities of precious metals and bulk commodities.

Andy understands the market in a way many traders can’t imagine. He’s booked vessels, armored cars, and trains to transport and store a broad range of commodities. And he’s worked directly with The United Nations and the legendary trading group Phibro.

Today, Andy remains in close contact with sources around the world and his network of traders.

“I have a vast Rolodex of information in my head… so many bull and bear markets. When something happens, I don’t have to think. I just react. History does tend to repeat itself over and over.”

His friends and mentors include highly regarded energy and precious metals traders, supply line specialists and international shipping companies that give him vast insight into the market.

Andy’s writing and analysis are on many market-based websites including CQG. Andy lectures at colleges and Universities. He also contributes to Traders Magazine. He consults for companies involved in producing and consuming commodities. Andy’s first book How to Make Money with Commodities, published by McGraw-Hill was released in 2013 and has received excellent reviews. Andy held a Series 3 and Series 30 license from the National Futures Association and a collaborator and strategist with hedge funds. Andy is the commodity expert for the website about.com and blogs on his own site dynamiccommodities.com. He is a frequent contributor on Stock News- https://stocknews.com/authors/?author=andrew-hecht

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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