An uptrend line marks dynamic support for the current advance that began from the April 25 swing low. Also, the downtrend line identifies a price area for potential support. If the uptrend line is broken the downtrend line is the next line to watch for possible support. The two lines cross at a price of 2.84, marking another price to watch. That price area can be watched along with this week’s low of 2.86.
A little lower is the important 20-Day MA at 2.75. Notice that the 20-Day line has now converged with the top boundary line of the pennant pattern. Each is marking a similar price support area. It is also interesting that the day the 20-Day MA hit the bottom boundary line of the pennant on June 6, was the day of the pennant breakout. Although it closed weak, the next day’s upside continuation made up for it.
Trend Anticipated to Resume Following Minor Retracement
Given the strong bullish behavior of natural gas during the current ascent, higher targets remain in sight. At the same time, the relative strength index momentum oscillator (RSI) is beginning to show signs of a bearish divergence. It is still early though but should be watched as the trend progresses.
Breakout Above 3.09 Shows Strength
Given today’s pullback, a rally above the day’s high of 3.09 provides a sign of strength. The next higher target zone, above the nearby 3.18 to 3.20 Fibonacci confluence zone, is the 3.39 swing high from early-January. Nevertheless, a decisive breakout above this week’s high of 3.16 has a good chance of exceeding that swing high eventually, if not on the first approach.
For a look at all of today’s economic events, check out our economic calendar.
Softer-than-anticipated US Producer Price Index figures temporarily boosted the mood.
Wall Street’s poor performance reflects a sour mood, backing demand for the US Dollar.
XAU/USD turned bearish and aims to pierce the weekly low at $2,286.69.
After a volatile Wednesday, the US Dollar recovered the ground lost following United States (US) first-tier events, pushing higher even against the safe-haven Gold in a risk-averse environment. XAU/USD trades below $2,300 a troy ounce, trimming weekly gains.
The US Dollar turned lower mid-European morning following the release of encouraging US inflation-related data. The US Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI) rose 2.2% YoY in May, easing from the 2.3% increase posted in April and below expectations for a 2.5% advance. On a monthly basis, the PPI declined by 0.2%.
The optimism was short-lived as US indexes turned sharply lower after the opening, pushing the Greenback higher across financial boards. At the time being, only the Nasdaq Composite trades in the green, up a modest 0.29%. The Dow Jones Industrial Average is the worst performer, down 225 points.
The upcoming Asian session will bring the Bank of Japan’s (BoJ) monetary policy decision. Market participants speculate the central bank will probably leave interest rates unchanged, although policymakers may also announce a reduction in bond purchases.
XAU/USD short-term technical outlook
The daily chart for XAU/USD shows that the risk of a bearish breakout has increased. The pair is trading below a firmly bearish 20 Simple Moving Average (SMA), while technical indicators resumed their slides within negative levels, in line with another leg lower. The 100 and 200 SMAs keep heading higher well below the current level, although they remain too far to become relevant. The weekly low at $2,286.69 is the immediate support level.
In the near term, and according to the 4-hour chart, the bearish case is even stronger. XAU/USD accelerated south after sliding below a now flat 20 SMA. Furthermore, the 100 SMA is crossing below the 200 SMA, both far above the shorter one. Finally, technical indicators crossed their midlines into negative territory, and maintain firmly bearish slopes, reflecting persistent selling interest.
Support levels: 2,286.70 2,271.90 2,258.30
Resistance levels: 2,308.80 2,321.55 2,333.10
XAU/USD Current price: $2,297.49
Softer-than-anticipated US Producer Price Index figures temporarily boosted the mood.
Wall Street’s poor performance reflects a sour mood, backing demand for the US Dollar.
XAU/USD turned bearish and aims to pierce the weekly low at $2,286.69.
After a volatile Wednesday, the US Dollar recovered the ground lost following United States (US) first-tier events, pushing higher even against the safe-haven Gold in a risk-averse environment. XAU/USD trades below $2,300 a troy ounce, trimming weekly gains.
The US Dollar turned lower mid-European morning following the release of encouraging US inflation-related data. The US Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI) rose 2.2% YoY in May, easing from the 2.3% increase posted in April and below expectations for a 2.5% advance. On a monthly basis, the PPI declined by 0.2%.
The optimism was short-lived as US indexes turned sharply lower after the opening, pushing the Greenback higher across financial boards. At the time being, only the Nasdaq Composite trades in the green, up a modest 0.29%. The Dow Jones Industrial Average is the worst performer, down 225 points.
The upcoming Asian session will bring the Bank of Japan’s (BoJ) monetary policy decision. Market participants speculate the central bank will probably leave interest rates unchanged, although policymakers may also announce a reduction in bond purchases.
XAU/USD short-term technical outlook
The daily chart for XAU/USD shows that the risk of a bearish breakout has increased. The pair is trading below a firmly bearish 20 Simple Moving Average (SMA), while technical indicators resumed their slides within negative levels, in line with another leg lower. The 100 and 200 SMAs keep heading higher well below the current level, although they remain too far to become relevant. The weekly low at $2,286.69 is the immediate support level.
In the near term, and according to the 4-hour chart, the bearish case is even stronger. XAU/USD accelerated south after sliding below a now flat 20 SMA. Furthermore, the 100 SMA is crossing below the 200 SMA, both far above the shorter one. Finally, technical indicators crossed their midlines into negative territory, and maintain firmly bearish slopes, reflecting persistent selling interest.
The Federal Reserve’s decision to maintain the federal funds rate target range at 5.25%-5.50%, as anticipated by the market, wasn’t the main story. Instead, it was the accompanying policy statement and press conference by Chair Jerome Powell that dampened expectations for a swift easing of monetary policy. Policymakers prioritized combating inflation, despite recent data showing some easing in consumer prices. This hawkish tilt by the Fed strengthened the US dollar, making dollar-denominated silver more expensive for foreign investors and exerting downward pressure on prices.
Silver Waits for Rate Cut Clarity
The silver market, which typically thrives on expectations of lower interest rates, now faces uncertainty. While recent inflation data offered a positive sign, the delay in rate cuts throws a curveball at the bullish narrative. Lower borrowing costs tend to make non-interest-bearing assets like silver more attractive, but the timing of those cuts remains unclear. This lack of clarity from the Fed is likely to result in volatile silver prices in the near term.
Economic Data and Fed Guidance Key
Traders should pay close attention to upcoming economic data releases and the Fed’s pronouncements for clues on the central bank’s next move. Initial jobless claims data and the producer price index for May, both scheduled for release today, could offer insights into inflation pressures. Additionally, any indications from the Fed about the timing of the single rate cut it now forecasts for 2024 will be crucial for gauging silver’s future direction.
Choppy Trading Ahead for Silver
With the Fed adopting a wait-and-see approach, silver’s short-term outlook is uncertain. While the recent inflation slowdown may provide some support, the delay in rate cuts could limit any significant upward momentum. Investors should be prepared for choppy price action until the Fed offers a clearer timeline for its monetary policy changes.
Gold price turns south toward $2,300 early Thursday, snapping a three-day rebound.
The US Dollar looks to extend post-US CPI data recovery, courtesy of the Fed’s hawkish hold.
Gold sellers remain poised to test the key $2,277 support, as the daily RSI stays bearish.
Gold price is trading in the red for the first time this week, looking to retest the $2,300 level early Thursday. Gold sellers fight back control following the hawkish US Federal Reserve (Fed) interest rate decision but stay cautious ahead of the US Producer Price Index (PPI) inflation data due later on Thursday.
Gold price enjoyed a good two-way business on Fed day
Gold price enjoyed good two-way price action on Wednesday, starting off the day on a cautious footing, consolidating Tuesday’s rebound in the lead-up to the US Consumer Price Index (CPI) data release.
Gold buyers received a fresh boost on a much softer-than-expected US CPI report, which bolstered expectations of Fed interest rate cuts this year. Increased dovish Fed bets smashed the US Dollar alongside the US Treasury bond yields across the curve, driving Gold price closer to the $2,350 barrier.
The headline CPI was flat over the month in May, below expectations for a 0.1% gain. Core CPI rose 0.2%, also below estimates for a 0.3% increase. The annual figures also came in softer than the market consensus.
However, the tide turned against Gold price, as sellers jumped back into the game on the Fed policy announcements. Gold price reversed nearly $15 from multi-day highs to settle with modest gains near $2,325 on Wednesday.
Fed held policy rates steady in the range of 5.25%-5.50%, following the June policy meeting. The revised Summary of Economic Projections, the so-called dot-plot, indicated the policymakers expect to cut rates only once in 2024, against a projection of three rate cuts in the March forecasts and down from two rate cuts widely anticipated.
Fed Chair Jerome Powell also delivered hawkish comments during his post-policy meeting press conference, noting that “more recent readings on inflation have shown easing. So far this year, we have not got greater confidence on inflation in order to cut.”
“Will need to see more good data to bolster confidence on inflation,” Powell added.
With the ‘Super Wednesday’ now out of the way, attention turns toward a fresh batch of top-tier US economic data, including the PPI report, which could raise doubts over the Fed’s hawkish outlook on interest rates.
Gold price will likely remain at the mercy of risk trends and the US Dollar price action, in the aftermath of the key US events.
Gold price technical analysis: Daily chart
As observed on the daily chart, the Gold price defied bearish pressures on Wednesday but the downside bias remains intact going forward, as the 14-day Relative Strength Index (RSI) holds well below the 50 level and a Bear Cross remains in the making.
The 21-day Simple Moving Average (SMA) is on the verge of crossing the 50-day SMA from above, which if happens will validate the bearish crossover, opening the door for a renewed downtrend in Gold price.
The immediate support is now seen at the $2,300 threshold, below which the May 3 low of $2,277 will be threatened. A sustained break below the latter is critical to boosting sellers toward the $2,250 psychological barrier.
Alternatively, the recovery in Gold price will need acceptance above key confluence support-turned-resistance near $2,350, where the 21-day and 50-day SMAs coincide.
Gold buyers will then flex their muscles toward the May 24 high of $2,364 on their way to the June 7 high of $2,388.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The US Consumer Price Index eased by more than anticipated in May.
Eyes turn to the Federal Reserve and Chairman Jerome Powell.
XAU/USD advances modestly in a risk-on scenario, support at $2,330.
Spot Gold peaked at $2,341.51 on Wednesday, as the US Dollar fell following the release of the United States (US) Consumer Price Index (CPI). Markets turned wildly optimistic after the Bureau of Labor Statistics (BLS) reported that inflation rose less than anticipated in May, easing from April’s levels. The CPI rose 3.3% YoY and held unchanged on a monthly basis. Furthermore, the annual core CPI rose 3.4%, while the monthly figure was up by 0.2%, below expected and previous figures.
XAU/USD retreated from such a high after Wall Street’s opening as demand for high-yielding assets accelerated, undermining the positive momentum of the bright metal, although it holds to most of its intraday gains above the $2,330 mark.
The focus now shifts to the Federal Reserve(Fed). The Federal Open Market Committee (FOMC) is about to end its two-day meeting and announce its decision on monetary policy. Financial markets widely anticipate policymakers will leave the benchmark rate unchanged in a floating range between 5.25% and 5.50%. Following the release of US inflation-related figures, markets rushed to price in a 63% chance of a rate cut by September, up from roughly 47% before the event. Chairman Jerome Powell will conduct a press conference following the announcement and may shed light on whatever policymakers plan for the near future of monetary policy.
XAU/USD short-term technical outlook
The daily chart for the XAU/USD pair is up for a third consecutive session, although gains are modest. The positive momentum is limited, as technical indicators advance, although within negative levels. At the same time, the 20 Simple Moving Average (SMA) maintains a modest downward slope above the current level, providing dynamic resistance at around $2,353.25. Finally, the 100 and 200 SMAs keep heading north well below the current level, limiting the downside.
In the near term, and according to the 4-hour chart, the risk for XAU/USD skews to the upside. The pair ran past its 20 SMA, which is currently losing its bearish slope. It remains below the 100 and 200 SMAs, both at around $2,345. Finally, technical indicators remain within positive levels but lost their positive momentum ahead of the Fed’s announcement.
Support levels: 2,328.90 2,313.30 2,300.00
Resistance levels: 2,345.00 2,353.25 2,368.70
XAU/USD Current price: $2,337.15
The US Consumer Price Index eased by more than anticipated in May.
Eyes turn to the Federal Reserve and Chairman Jerome Powell.
XAU/USD advances modestly in a risk-on scenario, support at $2,330.
Spot Gold peaked at $2,341.51 on Wednesday, as the US Dollar fell following the release of the United States (US) Consumer Price Index (CPI). Markets turned wildly optimistic after the Bureau of Labor Statistics (BLS) reported that inflation rose less than anticipated in May, easing from April’s levels. The CPI rose 3.3% YoY and held unchanged on a monthly basis. Furthermore, the annual core CPI rose 3.4%, while the monthly figure was up by 0.2%, below expected and previous figures.
XAU/USD retreated from such a high after Wall Street’s opening as demand for high-yielding assets accelerated, undermining the positive momentum of the bright metal, although it holds to most of its intraday gains above the $2,330 mark.
The focus now shifts to the Federal Reserve(Fed). The Federal Open Market Committee (FOMC) is about to end its two-day meeting and announce its decision on monetary policy. Financial markets widely anticipate policymakers will leave the benchmark rate unchanged in a floating range between 5.25% and 5.50%. Following the release of US inflation-related figures, markets rushed to price in a 63% chance of a rate cut by September, up from roughly 47% before the event. Chairman Jerome Powell will conduct a press conference following the announcement and may shed light on whatever policymakers plan for the near future of monetary policy.
XAU/USD short-term technical outlook
The daily chart for the XAU/USD pair is up for a third consecutive session, although gains are modest. The positive momentum is limited, as technical indicators advance, although within negative levels. At the same time, the 20 Simple Moving Average (SMA) maintains a modest downward slope above the current level, providing dynamic resistance at around $2,353.25. Finally, the 100 and 200 SMAs keep heading north well below the current level, limiting the downside.
In the near term, and according to the 4-hour chart, the risk for XAU/USD skews to the upside. The pair ran past its 20 SMA, which is currently losing its bearish slope. It remains below the 100 and 200 SMAs, both at around $2,345. Finally, technical indicators remain within positive levels but lost their positive momentum ahead of the Fed’s announcement.
The US Consumer Price Index eased by more than anticipated in May.
Eyes turn to the Federal Reserve and Chairman Jerome Powell.
XAU/USD advances modestly in a risk-on scenario, support at $2,330.
Spot Gold peaked at $2,341.51 on Wednesday, as the US Dollar fell following the release of the United States (US) Consumer Price Index (CPI). Markets turned wildly optimistic after the Bureau of Labor Statistics (BLS) reported that inflation rose less than anticipated in May, easing from April’s levels. The CPI rose 3.3% YoY and held unchanged on a monthly basis. Furthermore, the annual core CPI rose 3.4%, while the monthly figure was up by 0.2%, below expected and previous figures.
XAU/USD retreated from such a high after Wall Street’s opening as demand for high-yielding assets accelerated, undermining the positive momentum of the bright metal, although it holds to most of its intraday gains above the $2,330 mark.
The focus now shifts to the Federal Reserve(Fed). The Federal Open Market Committee (FOMC) is about to end its two-day meeting and announce its decision on monetary policy. Financial markets widely anticipate policymakers will leave the benchmark rate unchanged in a floating range between 5.25% and 5.50%. Following the release of US inflation-related figures, markets rushed to price in a 63% chance of a rate cut by September, up from roughly 47% before the event. Chairman Jerome Powell will conduct a press conference following the announcement and may shed light on whatever policymakers plan for the near future of monetary policy.
XAU/USD short-term technical outlook
The daily chart for the XAU/USD pair is up for a third consecutive session, although gains are modest. The positive momentum is limited, as technical indicators advance, although within negative levels. At the same time, the 20 Simple Moving Average (SMA) maintains a modest downward slope above the current level, providing dynamic resistance at around $2,353.25. Finally, the 100 and 200 SMAs keep heading north well below the current level, limiting the downside.
In the near term, and according to the 4-hour chart, the risk for XAU/USD skews to the upside. The pair ran past its 20 SMA, which is currently losing its bearish slope. It remains below the 100 and 200 SMAs, both at around $2,345. Finally, technical indicators remain within positive levels but lost their positive momentum ahead of the Fed’s announcement.
Crude oil futures traded flat Wednesday as this week’s rally eased after Department of Energy data indicated soft demand for gasoline last week.
Oil prices were more than 1% higher earlier in the session, but pulled back after the U.S. reported a 3.7 million barrel crude build for last week, compared with analyst expectations of a 1 million barrel draw.
Gasoline stockpiles rose by 2.6 million barrels, compared to 891,000 expected by analysts. Fuel demand increased by 94,000 bpd to about 9 million bpd total. Daily average fuel demand has been tepid, or 1.5% lower compared to same period last year, despite the start of the summer driving season.
Here are today’s energy prices:
West Texas Intermediate July contract: $77.94, up 4 cents. Year to date, U.S. oil has gained 8.7%.
Brent August contract: $82.03 per barrel, up 11 cents. Year to date, the global benchmark is ahead 6.4%.
RBOB Gasoline July contract: $2.39 per gallon, down 0.56%. Year to date, gasoline has advanced 14%.
Natural Gas July contract: $3.05 per thousand cubic feet, down 2.27%. Year to date, gas is up 21.5%.
Still, the Department of Energy sees global demand rising this year by 1.1 million bpd, up from a previous forecast of 900,000 bpd. The increased demand implies a supply deficit with world production expected to rise 800,000 bpd in 2024.
“In the short term, the oil market is likely to tighten,” Martijn Rats, commodity strategist at Morgan Stanley, told clients in a note. The investment bank sees a 1.2 million bpd deficit in the third quarter, which could push Brent prices to $86 per barrel.
OPEC, meanwhile, stuck to its demand growth forecast of 2.2 million bpd on solid global economic growth of 2.8% this year. Those forecasts clashed with a bearish outlook from the International Energy Agency, which sees weakening demand and rising supplies.
Cool inflation data also raised hopes that the Federal Reserve will cut interest rates in September. Lower rates can stimulate economic growth and lift oil demand.
See Chart…
WTI vs. Brent
Citi analysts described the recent price action as rangebound, with volatility near a decade low. The bank also expects a tight third quarter due to summer fuel demand, though it anticipates that the planned OPEC+ production increases will make for a “bear market” late in 2024 and into 2025 with Brent falling to $60 per barrel.
U.S. crude oil rose more than 1% Wednesday, extending this week’s rally as OPEC and the Department of Energy see steady demand this year.
The Department of Energy raised its global consumption growth forecast to 1.1 million barrels per day, or bpd, up from a previous forecast of 900,000 bpd. The increased demand implies a supply deficit with world production expected to rise 800,000 bpd in 2024.
“In the short term, the oil market is likely to tighten,” Martijn Rats, commodity strategist at Morgan Stanley, told clients in a note. The investment bank sees a 1.2 million bpd deficit in the third quarter, which could push Brent prices to $86 per barrel.
Here are today’s energy prices:
West Texas Intermediate July contract: $79.16, up $1.29, or 1.66%. Year to date, U.S. oil has gained 10.5%.
Brent August contract: $83.22 per barrel, up $1.30, or 1.6%. Year to date, the global benchmark is ahead 8%.
RBOB Gasoline July contract: $2.44 per gallon, up 1.56%. Year to date, gasoline has advanced 16.3%.
Natural Gas July contract: $3.04 per thousand cubic feet, down 2.65%. Year to date, gas is up 21%.
OPEC, meanwhile, stuck to its demand growth forecast of 2.2 million bpd on solid global economic growth of 2.8% this year. Those forecasts clashed with a bearish outlook from the International Energy Agency, which sees weakening demand and rising supplies.
WTI vs. Brent
Citi analysts described the recent price action as rangebound, with volatility near a decade low. The bank also expects a tight third quarter due to summer fuel demand, though it anticipates that the planned OPEC+ production increases will make for a “bear market” late in 2024 and into 2025 with Brent falling to $60 per barrel.
As expected, gold prices have been trading in a narrow range with a downward bias, settling around $2315 per ounce pending the reaction to key US data and events.
Gold prices have stabilized after recent strong selling that took them to a one-month low of $2286 per ounce, amid stronger-than-expected US jobs data and a slowdown in the pace of record gold buying by central banks, led by China.
According to currency trading platforms, the US dollar index continued its gains for the third session to 105.3 on Tuesday, its highest level in about a month, as traders reduced their bets on US rate cuts and prepared for the FOMC meeting and key CPI data. After Friday’s stronger-than-expected US jobs report, traders now see only a 52.6% chance that the Fed will cut rates in September, compared with 66.9% a week ago.
Meanwhile, today begins the two-day FOMC meeting, and although the Fed is expected to leave the Fed’s target range for monetary policy unchanged, traders are awaiting hints on when the first-rate cut could be made.
Also, new economic forecasts will be released. Also, the headline CPI and PPI readings are due out this week. Additionally, the dollar likewise benefited from a flight to safety amid political instability in France. Meanwhile, the Bank of Japan is widely expected to keep interest rates unchanged but is likely to discuss reducing its monthly bond purchases.
On the stock trading platforms front, US stock indexes fell on Tuesday, with the S&P 500 down 0.3%, the Nasdaq down 0.2%, and the Dow down 250 points, after both the S&P 500 and Nasdaq closed at record highs in the previous session. Traders refrained from making big bets ahead of the CPI report and the start of the two-day FOMC meeting. Furthermore, the Fed is expected to leave rates unchanged today, but investors will be looking for more clues about the timing of the first rate cut.
According to US stock trading, utility and energy stocks were the worst-performing sectors, while telecom stocks managed to stay in the green. Megacap stocks were mixed, with Microsoft (-0.2%) and Meta (-0.4%) down, while Nvidia was flat, and Amazon (0.3%) and Alphabet (0.9%) were up. Also, Apple’s stock rose (1.7%) even after the company’s new AI system failed to convince investors. Meanwhile, JPMorgan’s stock fell about 2.5%, Tesla fell 1.6%, and Exxon Mobil fell 1.4%.
Gold Price Forecast and Analysis Today:
The price of gold is expected to remain stable within its current range until the market and investor reaction to the announcement of U.S. inflation figures and the Federal Reserve’s statement, which significantly and directly impact the performance of the U.S. dollar, and consequently, the price of gold. According to the daily chart performance, the trend is still downward. If gold breaks below the support level of $2,300, it will encourage further bearish movement, targeting the next key support levels at $2,275 and $2,258 per ounce. Conversely, a move towards the resistance level of $2,355 per ounce would empower the bulls to regain control of the trend.
Crude oil futures held to gains Tuesday as OPEC stuck to its demand forecasts, counting on steady economic growth this year.
Oil prices rallied more than 2% on Monday with U.S. crude oil booking its best day since Feb. 8. The market has recovered the losses from last week, after selling off to four-month lows in the wake of the decision by OPEC+ to increase crude production in October.
Here are Tuesday’s closing energy prices:
West Texas Intermediate July contract: $77.90 per barrel, up 16 cents or 0.21%. Year to date, U.S. oil has gained 8.7%.
Brent August contract: $81.92 per barrel, up 29 cents, or 0.36%. Year to date, the global benchmark is ahead 6.3%.
RBOB Gasoline July contract: $2.40 per gallon, little changed. Year to date, gasoline is up 14.5%.
Natural Gas July contract: $3.12 per thousand cubic feet, up 7.67%. Year to date, gas has advanced 24%.
OPEC is projecting oil demand growth of 2.2 million barrels per day for 2024 and 1.8 million bpd in 2025, according to the group’s monthly report. The oil producers see global economic growth of 2.8% this year and 2.9% in 2025.
OPEC expects the services sector to maintain stable momentum and drive economic growth in the second half of the year, “particularly supported by travel and tourism, with a consequent positive impact on oil demand.”
WTI vs. Brent
John Evans, analyst at oil broker PVM, said traders appeared to be “buying the dip” after many investors abandoned their long positions in the wake of the OPEC+ production decision.
“After oil prices experienced a bearish confluence of events, shook out much length and toyed with being oversold, there is almost an inevitability in the rally back to current levels,” Evans said in a note.
Money managers cut their net long position in Brent by 69% week over week to the lowest level since 2014 in the wake of the OPEC+ decision, according to JPMorgan.
Despite the bearish sentiment last week, Goldman Sachs forecast the market will enter into a deficit on summer fuel demand that will push Brent back up to $86 per barrel in the third quarter.
Phil Flynn, senior market analyst at the Price Futures Group, said “the market seemed to awaken” to the fact that the world is “sleepwalking into a global oil supply deficit” given OPEC’s production cuts remain in place for now and rig counts are falling in the U.S.
Traders are looking ahead to the conclusion of the Federal Reserve meeting and U.S. inflation data for May on Wednesday. The International Energy Agency will release its monthly oil market report the same day.
