Commodities. Oil and Gold Daily - August 24, 2017

> Strong EIA data supports oil. Yesterday, Brent for October delivery, after trading just above $51.6/bbl during the first half of the day, took off after the EIA weekly inventory report had been released, surging past $52/bbl, and eventually settled at $52.57/bbl, up $0.7/bbl on the day.
The EIA reported a 3.3 mln bbl draw in US crude inventories to 463.16 mln bbl in the week to August 18, mostly in line with the Bloomberg median estimate of 3.5 mln bbl. It was mostly driven by a 0.06 mln bpd increase in exports, to 9.3 mln bpd, as well as by the still-strong domestic refining rate, which, despite a weekly decline, was still a very high 17.46 mln bpd. In the period, US crude production edged up 0.026 mln bpd to 9.528 mln bpd. In our view, larger gains in crude prices were capped by a second consecutive increase in imports w-o-w (Venezuela was the major contributor this time). The significant decline in imports from Saudi Arabia promised previously by its energy minister has yet to materialize; however, this can be explained by the lag due to shipping.
As we had expected, the gasoline stock data decided the fate of oil prices yesterday. After rising for two weeks in a row, gasoline inventories fell 1.2 mln bpd, in line with the Bloomberg median estimate. Gasoline imports eased, while demand and exports increased (Mexico continued to show high demand for US gasoline). The 0.1 mln bpd weekly gain in demand, to 9.63 mln bpd, suggests that the peak time of the year for driving in the US has not ended yet, as many had concluded on last week's data.
The oil market remains tight at the moment. The combination of high US crude consumption and high gasoline demand is likely to last until mid-September, when refinery maintenance will pick up and gasoline demand will drop. For the rest of this week, tropical storm Harvey, which is expected to become a hurricane and move toward the Texas coast on Friday evening, will take center stage. Gulf Coast drillers have already taken precautionary measures, shutting down operations and evacuating workers. This may provide some support to prices in the short term. All else being equal, we expect Brent to push toward $53/bbl.
> Gold still range-bound ahead of Jackson Hole. Yesterday, gold surged to the upper end of its recent $1,285-1,290/oz trading range late in the day as the dollar and Treasury yields eased. The greenback ceded ground to the euro, which strengthened in the wake of strong Eurozone PMI figures and a Mario Draghi speech in which the ECB President warned of new challenges lying ahead and acknowledged the need to get a better understanding of new realities. US President Donald Trump's recent proclamation regarding his promised US-Mexico border wall remained in the spotlight throughout the day yesterday, supporting safe-haven assets, such as gold. This morning both Treasury yields and the dollar have been paring some of their recent losses, pushing gold back toward the middle of its $1,285-1,290/oz range. We expect the yellow metal to remain within this corridor ahead of the highly anticipated Jackson Hole meeting, where speeches from the Fed chair and ECB president could provide clues on monetary policy, as well as QE tapering in the EU.