Commodities: Crude oil and gold futures in focus
By Alexander Bueso
Date: Friday 21 Jun 2019
(Sharecast News) - Energy futures continued moving ahead at the end of the week as traders kept an watchful on the news flow coming out of the Persian Gulf and the US dollar continued to see some selling pressure.
RBOB gasoline for July delivery was especially strong, climbing 3.36% to $1.8463 a gallon on NYMEX, alongside a rise of 0.99% to $65.09 a barrel for August Brent on the ICE.
According to multiple reports, overnight the US administration had initially gone as far as to approve air strikes against targets in Iran, but later opted not to carry through on those plans.
But there was some market chatter referencing the possibility that they might yet be revived at a later date.
Investors were also looking out to the 28-29 June G-20 leaders' summit and the 1-2 July meeting of OPEC ministers as potential catalysts for prices.
"The next 12 days could be volatile for crude, even absent conflict risks. The Trump/Xi summit at the G-20 seems highly unlikely to resolve the current trade dispute, but a return to the negotiating table could allay some concerns about crude demand," said analysts at Jefferies.
"OPEC+ will meet on July 1-2 and an extension of production targets through the rest of the year seems highly likely - probably a consensus view."
Gold futures continued to be in the spotlight.
The August contract on COMEX was only 0.12% higher to $1,398.60/oz. but briefly popped its head above the pyschological $1,400/oz. mark and various analysts could be heard pointing out to clients the possibility for further gains, including those at Citi, who spied a possible move towards $1,500.9-1,600.0/oz. for over the next 12 months.
All of the main LME base metals contracts meanwhile were weaker on Friday, with three-month copper down from $5,976 per metric tonne at the open to $5,971 per tonne.
"LME metals continued to ease back from the highs seen yesterday, and equity indices retreated as the dust settled on the Fed rate signals and investor focus shifts to geopolitical tensions in the Middle East, together with the likely resumption US/China trade talks at some point during the G20 summit at the end of next week," said traders at Sucden Financial.
As of 1754 BST, the Bloomberg commodity index was drifting 0.19% lower to 79.01 even as the US dollar spot index dipped 0.13% to 96.5040.
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