Commodities Daily - June 24, 2021

> Oil stabilizes amid upbeat EIA inventory data. Brent is hovering above the $75/bbl mark as we write, with the market awaiting weekly US initial jobless claims, US May durable goods orders and the third print of US 1Q21 GDP. We see Brent holding around $75.5/bbl today amid a lack of strong upbeat catalysts that it will need to overcome technical resistance factors and rally further.> Gold holds steady while markets weigh Fed comments. Gold stuck around the $1,780/oz mark yesterday while the 10y Treasury yield edged up to 1.49%. Fed officials gave out some hawkish signals, while US macro data was mixed. Bullion remains at $1,780/oz as we write. Today, the market awaits US wholesale inventories and durable goods orders for May, the third reading of US GDP for 1Q21, and US initial jobless claims. We expect bullion to remain range-bound at $1,765-1,795/oz.OIL STABILIZES AMID UPBEAT EIA INVENTORY DATA Brent rallied $1.2/bbl to $76/bbl yesterday morning amid upbeat preliminary eurozone PMI data for June, as the relaxation of restrictions has unleashed pent-up demand and driven a boom in the dominant services sector but also caused price pressures to soar. Brent then began to slide amid mixed US preliminary PMI data for June and ahead of the much-anticipated weekly EIA inventory report. Although the US factory activity index rose to record high in June, the services PMI dropped significantly m-o-m, while the composite PMI slipped from May's peak of 68.7 to 63.9. Also pressuring oil prices during the latter half of the day was the fact that the dollar began to strengthen.Following the API's reported 7.2 mln bbl crude stock draw on Tuesday, the EIA yesterday registered a 7.6 mln bbl draw to 459.0 mln bbl. US oil production fell by 0.1 mln bpd to 11.1 mln bpd, despite refineries reducing inputs by 0.22 mln bpd to 16.1 mln bpd. The drop could have been a lot higher had it not been for imports, which reached their highest level since July 2020. The refined product data was mixed, with gasoline stocks down 2.93 mln bbl to 240.0 mln bbl and distillate stocks up 1.75 mln bbl at 137.9 mln bbl. Total commercial petroleum stockpiles (oil and refined products combined, excluding strategic petroleum reserves) fell 5.8 mln bbl. Gasoline demand is back above 9.4 mln bpd for the first time since May, as Americans continue to return to the highways. Demand should improve further as California's full reopening gathers speed. Total refined product demand reached its highest level since March 2020, with the biggest jump coming in jet fuel, which was no surprise given rising passenger traffic numbers at airports.Brent struggled to rally after the upbeat release, as one technical indicator began to signal that prices may have climbed too far and too fast, with Brent now flirting with overbought territory judging by the 14d RSI. Furthermore, yesterday investors were closely watching the Saudi energy minister for any comments ahead of next week's OPEC+ meeting. He said that OPEC+ has "also a role in taming and containing inflation, by making sure that this market doesn't get out of hand." The comments came as OPEC+ countries weigh up whether to further increase production in the coming months after boosting output between May and July. But the minister also cautioned that it was unclear whether oil prices were rising due to "real supply and demand" or because of "expectations and trajectories that are excessively optimistic." Brent eventually settled at $75.19/bbl, up $0.38/bbl on the day.Brent is hovering above the $75/bbl mark as we write, with the market awaiting weekly US initial jobless claims, US May durable goods orders and the third print of US 1Q21 GDP. We see Brent holding around $75.5/bbl today amid a lack of strong upbeat catalysts that it will need to overcome technical resistance factors and rally LD HOLDS STEADY WHILE MARKETS WEIGH FED COMMENTSGold traded sideways around the $1,780/oz mark yesterday while the 10y US Treasury yield edged up to 1.49%. EUR/USD stayed around 1.19, curbing movements in gold. US macro data was mixed but mostly supportive for gold, pushing it above $1,790/oz at one point. US new home sales data for May fell 5.9% m-o-m, versus the consensus forecast of a 0.2% increase. The Markit US services PMI for June came in at 64.8, below the consensus of 70 and indicating the economic recovery is slowing. The US manufacturing PMI came in better than expected at 62.6 (versus 61.5), creating a headwind for bullion. In the eurozone, the manufacturing PMI came in above expectations at 63.1 while the services PMI was in line at 58. Fed officials continued to send mixed signals, with another official offering a hawkish view yesterday. Dallas Fed President Robert Kaplan said he forecasts a rate increase in 2022 and that tapering could occur sooner than the markets expect. Atlanta Fed President Raphael Bostic said he expects a decision on scaling back the bond purchases within the next few months and a rate hike in 2022 in response to the faster than expected economic recovery. These comments created additional pressure for gold, which eventually settled near $1,780/oz.Gold is hovering near $1,780/oz as we write. Today, the market awaits US wholesale inventories and durable goods orders for May, the third reading of US GDP for 1Q21, and US initial jobless claims. We expect bullion to remain range-bound at $1,765-1,795/