COMMODITIES: Oil Slides Further on Supply Concerns as Gold Follows
- Mounting concerns that this weekend's OPEC+ meeting could result in further supply drove oil lower overnight.
- Russian deputy PM Novak added to the pressure suggesting that OPEC+ will 'look at the situation as a whole before making a decision.'
- Adding to the downward pressure was data showing US crude inventories have risen to the highest in several months, suggesting that buying may be curtailed in the third quarter.
- Goldman Sach's analysts suggest that Brent could reach low $50s over the next year according to reports published by BBG.
- WTI finished the US session down -0.77% at US$63.48. Since the 2025 high of US$80.04 in mid-January, WTI is now lower by over 20% and has no technical support below it, with all major moving averages above.
- Brent finished down -0.90% at US$66.99 as it too has broken below all major moving averages.
- Gold eased overnight ahead of the non-farm payrolls tonight.
- Gains of 3.20% in the first three trading days of the week were enough for investors to take profit overnight as gold backed off to US$3545.85, down -0.38%.
- Gold had a new closing high earlier in the week of US$3,559.42 on rate cut hopes and bond market jitters.
- The overnight falls concluded seven successive days of rally as gold's 14 day Relative Strength Index tipped into overbought territory, potentially another factor leading to the overnight decline.
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JGB TECHS: (U5) NFP Tips Prices Sharply Higher
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 138.80 @ 15:17 GMT Aug 5
- SUP 1: 137.32 - Low Jul 25
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs rallied sharply alongside global bond markets Friday, piercing mid-week resistance in the process. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal. A return lower would signal scope for an extension towards 136.57, a Fibonacci projection.
JGB TECHS: (U5) NFP Tips Prices Sharply Higher
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 138.80 @ 15:17 GMT Aug 5
- SUP 1: 137.32 - Low Jul 25
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs rallied sharply alongside global bond markets Friday, piercing mid-week resistance in the process. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal. A return lower would signal scope for an extension towards 136.57, a Fibonacci projection.
OIL: Crude Continues August Decline, Doubts US Can Restrict Russian Oil
Oil prices fell again on Tuesday and are now down over 5% in August. The market believes there will be a deal between Russia and the US over Ukraine and if not, US tariffs won’t be able to stop the shipment of Russian crude any way. There is talk of a ceasefire in the air but Russia is considering its choices. The market is widely expected to face excess supply as OPEC raises output and a major US shale operator is cutting investment.
- WTI fell 1.7% to $65.17/bbl after reaching a low of $65.03. The benchmark is now down 5.9% this month. It is currently around $65.21, below the 50-day EMA at $65.48. The bear trigger is at $62.84.
- Brent is 1.4% lower at $66.54/bbl after falling to $66.41 and is now down 5.1% in August. It continued to trade below the 50-day EMA at $68.05 opening $65.06, 30 June low.
- US President Trump reiterated that if there isn’t a truce in Ukraine by August 8 the US will increase restrictions on Russia, including sanctioning its shadow fleet, and add tariffs on those who purchase its oil. He has been targeting India but PM Modi is not bowing to the pressure. China has also now been mentioned.
- In July, Trump said that tariffs of around 100% could be imposed but on Tuesday he said he wouldn’t name a figure. He also noted that US special envoy Witkoff was in Russia on Wednesday and is waiting to see what comes out of his meetings.
- Bloomberg reported that US oil inventories fell a more-than-expected 4.2mn last week, according to people familiar with the API data. Gasoline stocks fell 900k while distillate rose 1.6mn. The official EIA data is out later today.
