Oil
- Israel is said to have accepted the proposed terms of a ceasefire in the conflict with Hamas, which were presented by the United States. The United States hopes to sign an agreement that would prevent Iran and Hezbollah from taking retaliatory actions related to the killing of two senior militants in recent weeks (for which Israel is blamed)
- Increased hopes for a ceasefire in recent days have led to further declines in oil prices. WTI is again approaching an important support zone around $72.50 per barrel
- Another factor contributing to the declines since the beginning of last week is mixed expectations regarding further oil imports by China, which are tied to weak economic data from that country
- We also see that a weak U.S. dollar is not currently a key indicator for oil. Instead, oil is rather a key indicator for the dollar now — weak oil prices imply dollar weakness due to increased expectations of interest rate cuts
- Donald Trump has announced that he will cut energy costs in half if elected president. This is related to his desire to revive oil and gas production, which would lead to the country's self-sufficiency in energy resources
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Open account Try demo Download mobile app Download mobile appCrude oil prices have already fallen significantly, which has also led to a decline in oil market backwardation. If spot prices continue to fall, a buy signal for oil could emerge soon. Source: Bloomberg Finance LP, XTB
WTI is approaching significant support at $72.50 per barrel. Seasonality suggests flat oil prices in the near term, and speculators have been selling off oil recently, though it is not yet extremely oversold. If the agreement between Israel and Hamas is signed, and interest rate cuts do not lead to a revival in the global economy, a drop to around $70 per barrel cannot be ruled out. Nonetheless, the $72.50 level is strong technical support. Source: xStation5
Natural Gas
- US natural gas prices have closed at their highest level in a month, although last week we observed tests around $2.30/MMBTU
- The increase in gas prices is related to the expectation of higher temperatures in the near future, which may increase gas consumption. Currently, gas consumption is slightly above the 5-year maximum, while production has clearly declined (though it remains near 5-year highs)
- Increased demand and slightly lower production have led to limited stockpile growth. At this point, inventories are below the 5-year maximum, and comparative inventories (comparing current inventory levels to the 5-year average and to levels from a year ago) are giving a strong bullish signal. Gas production is currently about 1% lower than last year, while demand is about 10% higher than last year
- However, it's important to remember the still significant contango, although it has decreased from around 67% to 57% when looking at the price difference for September-January contracts. The upcoming rollover this week should be around 5-6%, with subsequent rollovers likely to be larger, depending on short-term demand
- Natural gas prices in Europe are hovering near 40 EUR/MWh, the highest since November of last year. In 2023, we saw an increase in gas prices in Europe from July to October, with a peak around 50 EUR/MWh. At that time, U.S. gas prices were above $3/MMBTU, although it's important to remember that high prices were also related to the futures curve (contango)
Current gas demand is slightly higher than the 5-year average, but gas consumption has likely already passed the seasonal peak. Source: Bloomberg Finance LP, XTB
Comparative inventories are clearly falling (inverted axis), which could provide potential for further price rebounds. Source: Bloomberg Finance LP, XTB
Contango in the market remains very large, but has decreased over the past month, indicating increasing short-term demand. Source: Bloomberg Finance LP
Gas prices in Europe are rebounding and are at their highest level since November last year. Further price increases in Europe could also lead to upward pressure in the U.S. if increased exports to Europe occur. Source: Bloomberg Finance LP, XTB
Gas inventories are now below the 5-year maximum. Source: Bloomberg Finance LP, XTB
Long-term seasonality suggests further price increases, although it should be noted that much of the increase will be due to the nature of the futures curve (significant contango). Source: Bloomberg Finance LP, XTB
Gold
- Gold is reaching historical highs, even despite an extremely large oversupply in the physical market
- However, a positive trend is emerging with gold purchases by ETF funds, which could lead to a significant reduction in oversupply in the third and fourth quarters of this year
- In a seasonal context, gold is not currently favored. In recent years, we've seen significant declines in September, likely related to the end of summer and the return of investors to the market
- However, it’s worth noting that central bank balance sheets have started to rise again, speculators are returning to the futures market, and implied volatility is reaching levels not seen since April 2023 and April 2024. During these periods, gold was in an upward phase
The maximum and average seasonality over the last 5 years does not currently favor gold. Source: Bloomberg Finance LP, XTB
September is one of the worst months for gold seasonally. Over the past 5 years, gold has lost an average of over 3% in September. October performs only slightly better. Source: Bloomberg Finance LP, XTB
ETFs are continually increasing their gold purchases, which should help mitigate the significant oversupply in the market. Source: Bloomberg Finance LP, XTB
Gold is in an upward phase, but seasonality suggests that we should reach a seasonal peak within the next week. Two key support levels are 2400 and 2450, along with the upward trend line and the 50-period moving average. Source: xStation5
Cocoa
- Cocoa has been under pressure in recent weeks, struggling to recover from the downward gap caused by extreme contract rollover
- Expectations for the upcoming season are mixed, with many market analysts pointing to a balanced market at best, due to ongoing uncertainty about production and a lack of response from processors to high prices
- However, it's worth noting that processors are still relying on stockpiles, which have exceeded the local low from 2019 and are now at their lowest levels since 2016
- Seasonality suggests that prices may find support for a rebound in the coming weeks
Cocoa inventories held by traders are currently the lowest since 2016. Source: Bloomberg Finance LP, XTB
Seasonality in cocoa indicates that further upward pressure is possible in the coming weeks. Source: Bloomberg Finance LP, XTB
Cocoa prices remain clearly below the peaks seen before the contract rollovers. This indicates that most traders have already rolled over their positions from the September to the December contract. Currently, the number of open positions on the September contract is about 10 times lower than on the December contract, where there are approximately 68,000 open positions. Source: xStation5
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