AMERICAS OIL: WTI crude pulled back
July 24 - Americas End-of-Day Oil Summary: WTI crude pulled back after the WSJ reported that Chevron can resume operations in Venezuela. The market had been higher amid trade optimism as the EU says a trade deal is within reach, which follows a US-Japan trade deal yesterday. Larger than expected stock draws and some signs of Azeri and Kazakh supply disruption were also supportive.
- The WSJ report details were unclear, but it follows recent discussions involving President Trump and Secretary of State Marco Rubio following last week’s prisoner swap where all 10 remaining Americans who were detained by Venezuela were released.
- The EU and US are closing in on a trade deal that would impose 15% tariffs on European imports, the FT wrote.
- EIA showed US crude inventories for the week to July 18 fell more than expected by 3.17mb/d while Cushing stocks rose 455kbbl but remained below the seasonal five-year range low.
- Russia's FSB security service has started handing out clearance for foreign tankers to access the Black Sea ports, allowing for Kazakhstan's oil exports to resume Reuters sources report. Kazakhstan didn't halt oil loadings from Russian sea ports, Interfax said.
- The oil-procurement patterns of India’s Reliance Industries Ltd. are coming under scrutiny after the EU announced new restrictions on diesel made from Russian crude, Bloomberg reports.
- The oil tanker Omni, carrying Russian Urals crude, has been diverted away from the sanctioned Nayara Energy’s Vadinar port to discharge its cargo at the port of Mundra in India, according to Reuters.
- JPMorgan sees a significant increase in crude volatility looking ahead to September, driven by a convergence of bullish and bearish factors in that month.
- Near term crude backwardation is finding some support today after gradually softening over the previous week.
- US cracks are under some pressure with product pricing lower and crude higher, amid some signs of easing refinery disruption.
- WTI Sep futures were up 1.2% at $66.03
- WTI Oct futures were up 1.0% at $65.15
- RBOB Aug futures were down 0.8% at $2.10
- ULSD Aug futures were up 1.4% at $2.41
- US gasoline crack down 1.2$/bbl at 21.10$/bbl
- US ULSD crack down 2$/bbl at 34.32/bbl
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Historical bullets
USDJPY TECHS: Shooting Star Reversal
- RES 4: 150.49 High Apr 2
- RES 3: 149.28 High Apr 3
- RES 2: 148.65 High May 12 and a reversal trigger
- RES 1: 146.19/148.03 Intraday high / High Jun 23
- PRICE: 145.19 @ 16:48 BST Jun 24
- SUP 1: 144.80 20-day EMA
- SUP 2: 144.34 Low Jun 18
- SUP 3: 142.80 Low Jun 13
- SUP 4: 142.12 Low May 27 and a key short-term support
USDJPY has reversed lower from Monday’s high. This undermines a recent bullish theme and yesterday’s price pattern appears to be a shooting star candle formation. If correct, it signals a reversal of the recent bull cycle. Support to watch lies at 144.80, the 20-day EMA. A clear break of this level would strengthen a bearish threat. On the upside, a move above Monday’s high of 148.03 would reinstate a bullish theme.
COMMODITIES: Crude Falls Sharply, Gold Pulls Back As Geopolitical Tensions Ease
- WTI has recouped some losses during US hours but remains down sharply on the day as the Israel-Iran conflict has de-escalated.
- WTI Aug 25 is down by 5.8% at $64.5/bbl.
- The geopolitical risk premium is unwinding as the risk to Iranian oil infrastructure or disruption to shipping in the Strait of Hormuz has eased.
- Market uncertainty is still high with trade disputes and OPEC output normalisation impacting demand and supply.
- For now, the sell-off is considered corrective and the pullback has allowed a recent overbought condition to unwind.
- Support to watch is at the 50-day EMA, at $64.52, which has been pierced. A clear break of it would signal scope for a deeper retracement towards $58.87, the May 30 low.
- On the upside, initial resistance to watch is $71.39, the 50.0% retracement of the Jun 23 - 24 high-low range.
- Meanwhile, spot gold has fallen by 1.5% to $3,317/oz, taking the yellow metal through the 50-dma support for the first time since mid-May.
- The move came on the back of the tentative ceasefire struck between Iran and Israel and it has seen gold narrow the gap with the June lows of $3,293.64, which form first support.
- Despite this, a bullish theme in gold remains intact and the latest pullback is considered corrective. Resistance at $3,435.6, the May 7 high, has recently been pierced.
FED: Kashkari: "Plausible" To Cut Amid 2+% Inflation If Labor Market Weakens
Minneapolis Fed Pres Kashkari (2026 voter) doesn't really comment on current monetary policy in a town hall Q&A session. Asked "do you see a scenario when where inflation is not at 2%, but rates still have to come down?", Kashkari responds in "balanced" fashion similar to Chair Powell's commentary at last week's FOMC meeting and in prior appearances:
- "In the case where, let's say, inflation is still too high and the unemployment the labor market is weak, that's a particularly challenging environment for a central bank because our two goals are in tension. They're not balancing each other out. We're kind of missing on both sides of our mandate. In that situation, if the labor market were to deteriorate very quickly or dramatically, I could imagine a scenario where we say, hey, we need to adjust rates to support the labor market. We have said when our two goals are in tension, we will take a balanced approach. What does a balanced approach actually mean? It's going to depend on what's happening in the economy in that time. I'm not forecasting this. I'm just saying it is a plausible scenario."
