Commodities Roundup: Oil on the rise, JPM sees Brent back to $80-$90 high by September

Oil prices rose on Thursday after snapping a five-day losing streak in the previous session, as hopes for a September interest rate cut by the Federal Reserve outweighed concerns about demand, while European natgaz gas prices grown again.

Brent raw futures (CO1: COM) traded +0.34% to $78.68 per barrel until 6 a.m. ET. US West Texas Intermediate crude oil futures (CL1: COM) rose 0.48% to $74.43. Oil benchmarks rose more than 1 percent on Wednesday after falling nearly $8 a barrel in five sessions on Tuesday.

Nearly two-thirds of economists now expect the Fed to cut interest rates in September, according to a May 31-June 5 Reuters poll.

Meanwhile, OPEC+’s decision to return oil supplies to the market later this year has alarmed traders, and summer inventory draws should be enough to push Brent back into the high $80-$90 range by September, according to JPM Commodities Research.

“But OPEC’s – albeit ambitious – intention to produce more could have a psychological effect on consumers’ willingness to replenish stocks,” the brokerage said, adding that production is unlikely to return in 2025 as balances soften dramatically and Brent falls to half $60. s.

Elsewhere, European gas prices rose after rising to their highest level this year on Monday after Gassco said a crack in an on-board pipeline forced the rig to shut down some of its transport operations of gases. Operations at the Nyhamna onshore processing plant have now temporarily ceased, according to the report.

In the metals space, gold, silver and platinum rose as the dollar eased as investors braced for the European Central Bank’s first interest rate cut since September 2019, a day after Canada cut its benchmark rate, while euro area inflation eased slightly to a decline. above the 2% target. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Meanwhile, concerns about Chinese demand are likely to keep base metal prices under pressure, ANZ said. Weak recent economic data also raised concerns as China’s official gauge of factory activity slipped into contractionary territory in May and a weak outlook for demand weighed on sentiment in the broader metals sector; with aluminum, nickel and zinc all posting sharp declines, the brokerage said.

Recent commodity price movements and a look at some ETFs