Commodities Daily - June 26, 2019

> Oil advances on bullish API report amid Trump threat to attack Iran; EIA data on the horizon. Investors are now positioning themselves for the latest EIA inventory report, which is due today at 17:30 Moscow time. We do not expect the data to be as bullish as the API's, as we think it is likely to show a crude oil stock draw of around 3-4 mln bbl and a smaller draw in gasoline stocks. The report is thus likely to be slightly bullish at face value, though it could leave investors disappointed given such a bullish picture from the API. The API report sent Brent rallying by a hefty $1/bbl overnight, which suggests that prices are unlikely to move higher if the EIA report turns out to be less bullish than the API's. Given the current negative stock market momentum, we see Brent slipping back toward the $65/bbl mark.> Gold gives up some gains following comments from Fed officials. US data released yesterday kept the outlook uneasy, indicating less confident consumers and weak new home sales. However, gold retreated from a 6y high following comments by Fed officials. Markets had already been pricing in a very aggressive 0.5% Fed cut at the July meeting, but a shift in rhetoric from Fed Chair Jerome Powell and St Louis Fed President James Bullard triggered a dollar recovery and a selloff in gold. We expect gold price volatility to persist over the short term, driven by news from this week's G20 summit and the situation between the US and Iran. It is currently trading near $1,410/oz.