Oil N’ Gold
More Analysis and Technicals on Crude Oil, Natural Gas, Gold & Silver
Investors remain thrilled by approval of the Greek austerity plan which is a must for getting funding from the EU/IMF. Stocks in Asia climb for a 5th consecutive day with the MSCI Asia Pacific Index gaining more than +1%. Commodities move sideways after volatile trading last Friday and it will likely be the case for today as the US market is closed for Independence Day holiday.
Oil prices initially plunged last Friday as manufacturing PMIs in various countries disappointed. China reported the latest PMI data today. Both the official data and the one complied by HSBC indicated the country’s manufacturing sector has slowed down in June. The China Federation of Logistics and Purchasing reported the index fell to 50.9, the lowest level since February 2009, in June from 52 in May. Meanwhile, the HSBC PMI data dropped to an 11-month low of 50.1 in June. In India, another growth driver, PMI fell to 57.5, the lowest level in 4 months, in May from 58 in April. Sky-high inflation and rate hikes have probably hampered growth. The UK PMI unexpectedly dropped to 51.3 in June from 52.1 a month ago. The market had anticipated a rise to 52.3. Market sentiment was bolstered again in the US session as the ISM manufacturing index surprisingly soared to +2 points to 55.3 in June. The market had anticipated a fall of -2 points to 51.5.
Several Australian data were released today. Building approvals contracted sharply, by -7.9% m/m (consensus: -0.5%), in May, following a drop of -0.3% in the prior month. Retail sales surprisingly slipped -0.6% m/m (consensus: +0.3%) in May after an upwardly revised +1.2% in April. At the July RBA meeting tomorrow, policymakers will likely leave the cash rate unchanged at 4.75%. At a speech on June 15, RBA governor Glenn Stevens signaled that the central bank is awaiting the set of inflation data in late July before deciding any policy measures.
Commitments of Traders:
With the exception of gasoline, speculators were bearish towards the energy complex. Net length for crude oil futures declined for a second consecutive week to 134 554 contracts while that for heating oil futures dropped to 17 372 contracts. Net length for gasoline futures, however, climbed higher to 55 480 contracts. Despite potential higher cooling demand amidst warmer weather, net short for natural gas futures advanced for a 3rd consecutive week to 179 398 contracts.
Speculators were bearish on precious metals. Net length for gold futures plummeted to 165 902 contracts while that for silver futures slid to 15 998 contracts. In PGMs, net lengths for platinum futures and palladium futures dropped for a second consecutive weeks to 16 471 contracts and 11 094 contracts respectively.
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