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Yawning deficit in the oil market to prop up prices

It was a mixed week for commodity prices as they faced conflicting pressures in the form of the appreciation of the US dollar, mounting supply risks and signs of some resilience in China’s demand. Next week, China’s August activity and spending data (Friday) will probably confirm that the economy fared better last month, offering some support to commodity prices. In other positive news, US August inflation data (Wednesday) should show a further fall in core inflation (even while gasoline boosts the headline rate) and could prompt a softer dollar.

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