Commodities Daily - June 9, 2021

> Oil resumes its advance ahead of EIA weekly inventory report. Brent has firmed to $72.8/bbl as we write after the AP reported a US crude oil inventory draw and despite builds in gasoline and distillate stocks. Today, investors will mainly focus on the EIA weekly inventory update, and if that is upbeat, Brent could climb from the $72.7-72.8/bbl resistance zone and begin to target the next resistance level at $73.3/bbl.> Gold steady despite ease in Treasury yields. Gold traded in a corridor of $1,890-1,900/oz yesterday despite the 10y Treasury yield having touched a recent low near 1.52%. Although mixed US statistics and a positive eurozone GDP revision created tailwinds for bullion, it failed to push it above $1,900/oz resistance. This morning bullion has been trading near $1,890/oz, and we think it will likely stay range-bound at around $1,875-$1,900/oz today. Investors will eye the final reading of US wholesale inventories.OIL RESUMES ITS ADVANCE AHEAD OF EIA WEEKLY INVENTORY REPORT Brent was trading around the $71/bbl mark yesterday morning and climbed to $72.5/bbl during US trading amid growing confidence in the oil demand outlook as accelerating vaccination rates are allowing people to travel more. There are signs that the coronavirus situation in India is improving, as the rate of new infections has slowed. The nation's oil refiners are taking advantage of weak demand to carry out maintenance in anticipation of a revival in fuel consumption in the coming months. The main highlight yesterday was the release of the monthly EIA oil market report, which turned out to be on the bearish side. The agency made a tiny 0.02 mln bpd downward adjustment to its previous global demand estimate, with India receiving the largest downgrade and the US and China leading the upward revisions. It raised its 2021 non-OPEC supply forecast higher by 0.18 mln bpd (with growth now seen at 1.17 mln bpd y-o-y versus 0.96 mln bpd forecast last month), with North America and the Asia-Pacific region leading the upward revisions, albeit partly offset by a downward revision to Brazilian output. All in all, the EIA now sees lower demand this year for OPEC crude (- 0.21 mln bpd compared to last month's estimate), stemming from higher non-OPEC supply.Oil prices rallied yesterday despite progress on reviving the nuclear deal with Iran, with US officials saying they have asked Tehran to restore full International Atomic Energy Agency inspections. Brent eventually settled at $72.22/bbl, up $0.73/bbl on the day. Early today, China's National Bureau of Statistics reported that factory-gate inflation reached its highest level since 2008 in May (the PPI climbed 9% y-o-y following a 6.8% y-o-y gain in April), driven by surging commodity costs, and further adding to global price pressures. Consumer prices increased 1.3% y-o-y, missing the consensus estimate of 1.6% and suggesting that retailers are not hiking prices yet given sluggish domestic demand.Brent has firmed to $72.8/bbl as we write after the API reported a US crude oil inventory draw (-2.11 mln bpd) and despite builds in gasoline (+2.41 mln bpd) and distillate stocks (+3.75 mln bpd). Today, investors will mainly focus on the EIA weekly inventory update, which we expect to show another large crude stock draw along with further gasoline stock gains and possibly a small build in distillate inventories. We think this would be sufficient to propel Brent beyond the $72.7-72.8/bbl resistance zone and allow it to start targeting the next resistance level at $73.3/ LD STEADY DESPITE EASE IN TREASURY YIELDSGold traded in a corridor of $1,890-1,900/oz yesterday despite the US 10y Treasury yield touching a recent low near 1.52%. Meanwhile, EUR/USD slid to 1.218, creating headwinds for gold prices. The US NFIB small business optimism index for May slid for the first time in four months, printing 99.6 points (consensus: 101) amid a labor market shortage and inflation worries having worked their way into business owners' economic projections. Additionally, the US trade balance for April came in slightly worse than expected, whereas the final reading of the eurozone GDP data for 1Q21 showed unexpectedly better numbers (-0.3%) than the previous -0.6% in quarter terms. That created support for bullion yesterday. However, US job openings data for April indicated a new record of almost 9.3 mln vacancies. This strengthens the view that the recent weak hiring data in the US was due to supply constraints. That may accelerate discussions of tightening monetary policy at the upcoming Fed meeting and will likely help hold gold prices where they are. Gold is trading steady near $1,890/oz as we write as markets await US CPI data due tomorrow. On the US agenda today are the final reading of US wholesale inventories for April and a 10y US Treasury auction. We expect bullion to remain range-bound at $1,875-1,900/