Oil
- Rising geopolitical tensions (Middle East, France, US) and the approaching hurricane season in the US are pushing oil prices sharply higher
- However, there is no sign of increased demand in the US - inventories have risen slightly, and despite the slight rebound, the crack-spread remains low
- Comparative inventories do not justify strong increases in oil at the moment, although, of course, a very busy holiday season during which there will be significant declines in oil stocks cannot be ruled out
- The spreads of the upcoming WTI and Brent oil contracts potentially suggest overvaluation. Of course, further increases cannot be ruled out if there is an escalation of the situation in the Middle East
- Long positions on Brent Crude rebound, although the number of long positions is still far from the levels of April and May, when the price tested the vicinity of $90 per barrel
Oil inventories are rising, although seasonality suggests they should already be falling. The key period of decline is July-August. Source: Bloomberg Finance LP, XTB
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Open real account TRY DEMO Download mobile app Download mobile appInventories are already above last year's levels. Stocks are also above the 5-year moving average. Source: Bloomberg Finance LP, XTB
Speculative positions on Brent crude oil are rebounding, reminiscent of the situation at the end of last year. However, the number of longs is still relatively low, looking at April/May levels. Source: Bloomnerg Finance LP, XTB
Contract spreads suggest possible slight overvaluation or extremely high demand for short-term oil supplies. Source: Bloomberg Finance LP, XTBThe price increase in the Brent oil market continues for the 4th week in a row. Previously, such a situation occurred in June/July last year. The entire upward wave ended then in mid-September. Then, too, there was a rebound in prices from the 200-period average. If the current situation were to repeat itself, we would have to see a clear drop in stocks (such as last year). This could at least lead to a test of the area around $90 per barrel. Source: xStation5
NATGAS
- Gas price falls below $2.5/MMBtu early in the first week of July
- Theoretically, the local low should be reached in late June and early July
- On the other hand, speculation continues that the worst of the heat in the US is behind us
- Seasonal weather behaviour indicates that the highest consumption of gas for electricity production occurs in late July and early August
- Weather forecasts for most U.S. states indicate continued high temperatures, though not extremely high
- Speculative positions on gas are falling (both longs and shorts). Low open interest does not work in favour of a given market, though of course it will depend primarily on the weather
Seasonality indicates that the local low may have already been reached, although on the other hand, many analysts say that the greatest heat is behind us. If these predictions were to come true, then possible declines to ranges of $2.2-2.3 USD/MMBtu. However, if there were to be a seasonal rebound, then possible increases even to the range of $3.0-3.3 USD/MMBtu. Source: Bloomberg Finance LP, XTB
Long and short positions are falling, although short positions are falling harder. In view of this, we are seeing a rebound in net positions. However, the decline in open interest is not positive for the price outlook. Source: xStation5The price has fallen below $2.5/MMBtu. The declines have continued for the 6th session in a row. The last such period was in February, and a steady price rebound occurred only weeks later (although the number of declines in a row then lasted 10 days). The key supply zone is the range from 2.2 to 2.3. A return to the uptrend could take place after a rise above $2.6, near the elimination of 38.2. Source: xStation5
Cocoa
- Cocoa continues to hold support at $7,000 per ton, although at the same time there is no sign of a change in fundamentals to a more positive one
- Cocoa stocks continue to fall, while if there was a consolidation in stocks, it could mean the start of stronger declines
- We are seeing a further decline in open-interest on cocoa, which does not serve the market's long-term upside
- On July 11 we will learn to process data in Europe, Asia and North America.
- At this point, cocoa is behaving in line with the 5-year average. The 5-year average suggests that prices could reach a local low in early August
Cocoa inventories continue their very strong declines. However, if stocks reach a local low, it could mean the end of long-term increases for cocoa. Source: Bloomberg Finance LP, XTB
The average behaviour of the price over the past 5 years suggests potential further declines and the reaching of a local low in early August. Source: Bloomberg Finance LP, XTB
Speculative positions on cocoa (longs - shorts) continue to fall, which is not a good sign for the continuation of long-term growth. Source: Bloomberg Finance LP, XTBThe cocoa price is holding support at $7,000 per ounce. The key support zone is around $6,000 per ounce, where the lower limit of the downward trend channel is located. A return to the uptrend could take place once the $8000 per ounce level is breached again. Source: xStation5
Gold
- Rising yields could hurt precious metals in the near term. However, if there is a change in communication from the Fed, which we expect in the second half of the vacation, then it will be possible to start a new upward wave and at least test the vicinity of historical peaks
- Geopolitical tensions in the world (Middle East, France, US) may cause gold prices to hold support at $2,300 per ounce, even despite a strong rise in yields
- Gold ETFs are seeing inflows, which could mean a very big change on the fundamentals side. We have typically seen inflows spike when monetary policy in the U.S. shifts to a more dovish stance
- In terms of seasonality, the price usually started to gain in late July and early August. Nevertheless, it is already apparent at this point that the price's behavior this year pales in comparison to the price's behaviour at most over the past five years. The price has basically remained in consolidation for a long time
- Although gold could potentially look for support from ETFs, the Q2 data may be mixed in terms of purchases from central banks. At the same time, we continue to see a reduction in long positions on the Shanghai Futures Exchange
Seasonality indicates that we can expect a recovery in late July. Potentially, this could be related to speculation about US rate cuts. Source: Bloomberg Finance LP, XTB
ETFs have not been selling off gold for quite some time, which could mean positioning for upcoming fundamental changes in the market. Source: Bloomberg Finance LP, XTB
At the same time, however, it is apparent that Chinese investors' enthusiasm for gold is fading, which may also be linked to an overly strong dollar. All the while, the number of long positions in gold on the Shanghai Stock Exchange is falling. Source: Bloomberg Finance LP, XTBGOLD cannot break above the zone associated with the 50-period average and the 2350 level. Given the recent rise in yields, one more test of the area around $2300 per ounce cannot be ruled out. After that, the further fate will depend on the Fed's statement at the end of July - a return to the upward trend with the expectation of cuts in September, or a drop to 2200-2250 if the Fed indicates that cuts will come only at the end of the year. Source: xStation5