Commodities Daily - May 16, 2019

> Oil up amid surging stock markets and less bearish EIA data despite IEA's gloomy outlook. Even though we think that total stocks (mainly crude oil) will drop sharply during the summer in the US, the almost 50 mln bbl build in total US stocks since mid-March will surely be discussed (along with the gloomy OPEC and IEA outlooks) at the very important JMMC meeting this weekend, where a decision could be made on the OPEC+ deal. Comments following the meeting will likely drive prices next week. We believe the market consensus now is that the deal will be extended, but on different terms. Thus, any rhetoric hinting at an end to the deal should be very negative for prices. We do not expect Brent to secure above resistance at $72.68/bbl (the 61.8% Fibonacci retracement level from Brent's October correction) today, though uncertainty surrounding the Middle East remains elevated.> Gold to trade sideways today. A batch of weak macro data from the US provided a tailwind for gold yesterday. So did reports of further protectionist measures from the US. However, we see $1,300/oz as a strong resistance level and expect gold to hold close to that mark.