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Crude Limits Weekly Decline Whilst Gold Suffers With USD Strength

COMMODITIES
  • Crude is finishing the session pushing higher into the settle but it’s not enough to claw back a weekly decline after seven weekly increases. The decline comes following poor economic data in China and with concern that the US rate tightening cycle may not be at an end which has also spilled into a significant lifting of longer dated Treasury yields.
  • Several major banks have revised up their crude price forecasts for this year and 2024, amid lower OPEC+ supply, lower inventories, and an upward revision in oil demand but forecasts remain below $100/bbl, at least not for a sustained period, given uncertainties about Chinese oil demand, higher non-OPEC crude supplies and economic slowdowns in the US and Europe.
  • Asian refiners are looking for sour crudes to replace Kuwaiti supply as the Gulf state cuts exports by almost 20%, whilst in non-OPEC supply, the Baker Hughes US rig count fell a further 5 to 520 for its lowest since the start of Russia’s invasion of Ukraine.
  • WTI is +1.1% at $81.30 but doesn’t test resistance at $84.89 (Aug 10 high), whilst support remains at $78.69.
  • Brent is +0.8% at $84.84, off support at $82.36 (Aug 3 low) but not testing resistance at $88.10 (Aug 10 high).
  • Gold is -0.1% at $1887.88 as it caps off a torid week for the yellow metal against trend USD appreciation fuelled by higher US yields and EM-related frailties. It sits off yesterday’s low of $1885.1 but has breached key support at $1893.1 (Jun 29 low) which signals scope for $1865.8 (76.4% retrace of Feb 28 – May 4 bull leg).
  • Weekly moves: WTI -2.3%, Brent -2.3%, Gold -1.4%, US nat gas -8.2%, EU TTF nat gas +3.1%.
Energy BulletsCommodities
Energy BulletsCommodities

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