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Oil Tracking Strongly For June, Gold Weighed By Higher USD

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Oil benchmarks are tracking firmer. Front month Brent last near $86.80/bbl, which is up 0.50% on end Thursday levels. We are tracking higher for the week (+1.83%) and comfortably up for the month of June (+7%). WTI was last around $82.20/bbl, with similar percentages recorded relative to Brent.

  • Geopolitical risks/Middle East conflict concerns still appear to be driving a premium in terms of prices. Politico reported on Thursday that, according to US officials, a "large-scale" confrontation between Israel and Hezbollah is likely to break out, "in the next several weeks" if Israel and Hamas fail to reach a cease-fire deal for Gaza.
  • A new refinery opening in China may also be aiding demand at the margins (see this BBG link). Note we get an update on the China economic picture this Sunday with the official PMI prints for June. The market expects an unchanged 49.5 outcome for manufacturing.
  • Ahead of this though we have US PCE data tonight, which will be a key focus point for the Fed outlook.
  • For WTI we are very close to $82.24/bbl a Fibonacci retracement level, a break above this level could see April 19 highs at $84/bbl targeted.
  • For gold, we sit lower in the first part of Friday dealings. We were last near $2320, off 0.30% for the session. This is in line with firmer USD and US yield levels, which emerged as the first US Presidential debate unfolded. For gold, dips under $2300 have generated support back to late April.
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Oil benchmarks are tracking firmer. Front month Brent last near $86.80/bbl, which is up 0.50% on end Thursday levels. We are tracking higher for the week (+1.83%) and comfortably up for the month of June (+7%). WTI was last around $82.20/bbl, with similar percentages recorded relative to Brent.

  • Geopolitical risks/Middle East conflict concerns still appear to be driving a premium in terms of prices. Politico reported on Thursday that, according to US officials, a "large-scale" confrontation between Israel and Hezbollah is likely to break out, "in the next several weeks" if Israel and Hamas fail to reach a cease-fire deal for Gaza.
  • A new refinery opening in China may also be aiding demand at the margins (see this BBG link). Note we get an update on the China economic picture this Sunday with the official PMI prints for June. The market expects an unchanged 49.5 outcome for manufacturing.
  • Ahead of this though we have US PCE data tonight, which will be a key focus point for the Fed outlook.
  • For WTI we are very close to $82.24/bbl a Fibonacci retracement level, a break above this level could see April 19 highs at $84/bbl targeted.
  • For gold, we sit lower in the first part of Friday dealings. We were last near $2320, off 0.30% for the session. This is in line with firmer USD and US yield levels, which emerged as the first US Presidential debate unfolded. For gold, dips under $2300 have generated support back to late April.