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Crude Extend Gains With USD Tailwind After Saudi And Russia Production Cut Extension

COMMODITIES
  • Crude oil has extended yesterday’s bounce, with the latest move supported by USD depreciation after the payrolls report (with a late lift in the USD index also taking the edge of crude gains) and yesterday’s announcement of Saudi and Russian cut extensions into September continuing to have an impact.
  • There was little reaction to OPEC’s JMMC recommended no change to the group’s current output policy during today’s meeting, widely expected by the market.
  • Russia is fully adherent to the OPEC+ deal to reduce output by 500kbpd, while the country has exceeded cuts of 500kbpd in June, Russian Deputy PM Alexander Novak said. Along with the rally in Brent on tightening supplies, key physical crude market indicators in Asia have also strengthened further after Saudi Arabia and Russia extended voluntary supply cuts.
  • WTI is +1.5% at $82.80 off a high of $83.22 that moved closer to resistance at $83.59 (Nov 7, 2022 high) having already set fresh YTD highs earlier in the week.
  • Brent is +1.3% at $86.20 after a high of $86.63 cleared a key resistance level at $86.18 to open the psychological $90/bbl.
  • Gold is +0.3% at $1940.49, benefiting from the softer USD but a surprisingly tame move considering the extent of the slide in Treasury yields as well. It doesn’t trouble resistance at $1972.4 (Jul 31 high).
  • Weekly moves: WTI +2.8%, Brent +1.5%, Gold -1.0%, US nat gas -2.4%, EU TTF nat gas +11.7%

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