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Recovery In Crude & Gold Aided By USD Tailwind

  • A volatile session for crude but one that is ending with ~1% gains, aided by a tailwind from USD depreciation after weaker than expected US data.
  • There are however continued concerns around energy demand in major markets like US and China, whilst signs of lower global oil inventories weigh against increasing supplies from Russia and Iran (the latter including Russian crude shipments at the highest in two months in the week to Aug 27).
  • Chinese refiners have a weaker outlook for the recovery in Chinese demand, with Sinopec (China’s biggest refiner) saying Monday that the country’s product demand in the second half would expand at a slower pace than in the first.
  • Shell is not shutting any of its offshore production due to Hurricane Idalia, a spokesperson for the company said.
  • WTI is +1.1% at $80.95, ultimately taking a step closer to resistance at $81.75 (Aug 21 high).
  • Brent is +1.0% at $85.24, moving closer to resistance at $85.68 (Aug 21 high) after which lies the bull trigger at $88.10 (Aug 10 high).
  • Gold is +0.8% at $1936.02, directly benefting from the slide in the USD. It has cleared the 50-day EMA ($1930.4) and next opens $1946.8 (Aug 4 high).

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