Oil News: 50-Day MA Caps WTI as OPEC+ Production Risks Cloud Short-Term Outlook

Commodity

Summary:

Oil prices remain capped below key resistance as traders await the OPEC+ meeting. Bearish sentiment dominates amid supply surplus, potential output hikes, and uncertainty from U.S. tariff developments.

Oil Prices Forecast Constrained by Resistance Levels and Weak Catalysts

Light crude oil futures were slightly lower in Friday trade, with upside momentum capped by technical resistance at the 50-day moving average of $62.40 and a nearby short-term pivot at $62.59. Buyers appear reluctant to commit above these levels without a clear catalyst. The market’s current consolidation phase, lasting six sessions, signals caution as traders await the outcome of the OPEC+ meeting scheduled for this weekend.

Should prices break through this resistance cluster, a swift test of the $64.19–$64.40 range becomes likely. Beyond that, the 200-day moving average at $66.66 would come into play as the next bullish target. On the downside, $59.51 serves as key support. This tight technical structure points to a market bracing for news that could tip sentiment decisively.

OPEC+ Output Hike Anticipated but Priced In

Brent and WTI contracts were on track for a second consecutive weekly loss, each down approximately 0.5%, as traders priced in the likelihood of another OPEC+ output hike. Market sentiment was dampened by media reports suggesting several delegates had already backed a production boost, potentially exceeding the prior 411,000 bpd increases seen at the last two meetings.

Commerzbank analysts noted that this anticipation has likely dulled any significant impact the official announcement might have. JPMorgan analysts added that a widening global surplus of 2.2 million bpd could force prices lower to trigger a supply response and rebalance the market. The OPEC+ gathering on Saturday—limited to eight key member states—may confirm these expectations or introduce an unexpected twist that could jolt prices.

U.S. Tariffs Inject Further Uncertainty Into Crude Markets

Adding to bearish pressure, oil prices dropped more than 1% on Thursday following a surprise legal development that kept sweeping U.S. tariffs in place. A federal appeals court temporarily reinstated the duties after they were blocked just a day earlier. These tariffs, dubbed “Liberation Day” measures by the Trump administration, have contributed to a more than 10% decline in oil prices since their announcement in early April.

Analysts caution that continued legal wrangling around U.S. trade policy will sustain an environment of uncertainty for crude demand forecasts. For now, the legal back-and-forth appears to be capping risk appetite among oil bulls.

Market Outlook: Bearish Bias Until OPEC+ Clarity Emerges

With technical resistance firmly in place, a growing global supply surplus, and unresolved U.S. trade tensions, the short-term outlook for oil remains bearish. Traders are likely to stay on the sidelines until OPEC+ delivers clear guidance on production policy. Unless the group surprises with a more moderate hike or signals restraint, further downside pressure is expected.

Source: fxempire

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Warren Takunda

Economic

Inflation data shouldn’t deter us from rate cuts, says Bank policymaker

Alan Taylor voted for a 0.5-point cut last month and feels recent economic figures are led by one-off factors

A member of the Bank of England’s interest rate-setting committee has warned that higher-than-expected inflation and growth figures should not distract policymakers from continuing to cut borrowing costs.

Alan Taylor, who was one of two monetary policy committee members to call for a bigger 0.5 percentage point cut last month, said that while he was not going to forecast his future votes, he felt that recent economic data was being led by one-off factors.

“I’m not going to pre-emptively announce my vote, but I think I indicated in my dissent that I thought we needed to be on a lower [monetary] policy path,” Taylor told the Financial Times in an interview.

The latest figures show UK inflation jumped by more than expected in April, to 3.5% from 2.6% in March, almost a percentage point higher than the Bank of England’s 2% target.

However, much of that rise reflected a jump in water bills, energy costs and council tax. “[Higher inflation] is not coming from demand and supply pressures; for the most part, it’s coming out of one-time tax and administered price changes,” Taylor said, adding that energy prices had otherwise been trending downwards.

“[The BoE] forecast path is saying there is going to be an inflation hump and then it’s going to go away,” he said

While the UK economy grew 0.7% in the first quarter, marking the fastest rise in a year, economists have said it was largely the result of stronger levels of business investment as companies rushed to beat Donald Trump’s tariffs. Taylor said he was still “pretty concerned” about the outlook.

Taylor was among two members of the nine-strong MPC who voted for a bigger 0.5% percentage point cut to interest rates earlier this month, which were ultimately cut by a quarter of a percentage point to 4.25%. Two members voted to hold at 4.5%.

His concerns about the outlook are due to “more risk piling up on the downside scenario because of global developments”, he said. Taylor said that includes ripple effects from the US president’s trade war.

“A trade war is going to be negative for growth,” Taylor said, adding that the tariff regime “is going to be a drag on growth for both the frictional reason and the uncertainty reason”. While the Labour government has hailed three trade pacts struck with the EU, India and US in recent weeks, Taylor said the UK was “not getting back to where we were before”.

He said: “These other things are perhaps welcome in their effects in certain sectors, but I think we need to keep our eye on the big shocks. We got a massive change in trade policy; we have a lot of uncertainty: I would focus on that as the big story.”

Source: Theguardian

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Adam

Commodity

Gold prices are weaker in early U.S. trading Friday but up from overnight lows following a new social media post from President Trump that somewhat rattled the stock market bulls and after a key U.S. inflation report that was deemed as not problematic. August gold was last down $22.30 at $3,322.00. July silver prices were last down $0.123 at $33.30.

President Trump just a short time ago posted on social media that he will no longer be “Mr. Nice Guy” with China, regarding trade. That modestly shook the stock market bulls and the stock indexes sold off a bit.

The just-released U.S. data point of the day, if not the week, is the personal income and outlays report that includes inflation indicators closely monitored by Federal Reserve officials. The PCE price index for April came in at up 2.1%, year-on-year and was seen up 2.2%, year-on-year, versus up 2.3% in the March report. The “core” PCE index (excluding food and energy) came in at up 2.5%, year-on-year and was seen up 2.6%, year-on-year and compares to up 2.6% in the March report. These numbers are not far from market expectations and did not significantly move the markets.

Thursday afternoon the U.S. Court of Appeals for the Federal Circuit granted a stay of the lower court’s injunction that had blocked President Trump’s emergency tariffs on a wide range of imports. The ruling temporarily reinstates the tariffs while the administration pursues its appeal of the decision that deemed the levies unauthorized under the International Emergency Economic Powers Act. This decision halts the 10-day countdown previously imposed by the trial court for the administration to suspend tariff collection. It allows the White House to continue enforcing the duties while the appellate court considers the merits of the administration’s arguments. Legal experts expect the case to proceed swiftly, but if the Federal Circuit ultimately sides with the lower court, the administration could still seek emergency relief from the Supreme Court. Meanwhile, trading partners and businesses are left navigating legal uncertainty, as broader questions remain about the president’s authority to impose tariffs unilaterally.

The key outside markets today see the U.S. dollar index firmer. Nymex crude oil futures prices are firmer and trading around $61.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.436%.

Other U.S. economic data due for release Friday includes advance economic indicators, the Chicago ISM business survey, and the University of Michigan consumer sentiment survey.

Gold price down following tame U.S. inflation data, Trump comments_1

Technically, August gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,200.00. First resistance is seen at the overnight high of $3,347.00 and then at $3,375.00. First support is seen at $3,300.00 and then at this week’s low of $3,269.10. Wyckoff's Market Rating: 6.5.

Gold price down following tame U.S. inflation data, Trump comments_2

July silver futures bulls have the slight overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $34.015. The next downside price objective for the bears is closing prices below solid support at the May low of $31.78. First resistance is seen at $33.75 and then at $34.015. Next support is seen at $33.00 and then at this week’s low of $32.80. Wyckoff's Market Rating: 5.5.

Source: kitco

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Michelle

Economic

Forex

US consumer sentiment rebounded in late May from one of the lowest readings on record earlier in the month and long-term inflation expectations retreated as concerns about the economy eased after the rollback of China tariffs.

The 52.2 final May sentiment index marked an improvement from the preliminary reading of 50.8, according to the University of Michigan. It was unchanged from April, one of the lowest levels on record. The median estimate in a Bloomberg survey of economists called for a final May reading of 51.5.

Consumers were also more sanguine about the longer-term inflation outlook. They saw costs rising an annualized 4.2% over the next five to 10 years, down from 4.4% in the prior month and the first decline this year.

Consumers expect prices to rise 6.6% over the next year, up just modestly from the 6.5% seen a month earlier, the data released Friday showed. The preliminary May figure was 7.3%.

The survey was concluded May 26, weeks after an agreement between the US and China to temporarily lower import duties. President Donald Trump’s trade policy has been feeding into more consumer apprehension that is weighing on economic activity.

A government report on Thursday showed the economy shrank in the first quarter as consumer spending softened and the trade deficit widened on a pre-tariff import surge. Economists largely anticipate restrained household demand and business investment over the course of the year.

“Sentiment had ebbed at the preliminary reading for May but turned a corner in the latter half of the month following the temporary pause on some tariffs on China goods,’’ Joanne Hsu, director of the survey, said in a statement.

Still, “consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future,” Hsu said.

The survey showed income expectations remained weak and respondents were still concerned about the possibility of losing their job. A gauge of sentiment about current personal finances fell from a month earlier to the lowest level since 2009.

The university's expectations index rose to 47.9 this month from 47.3 in April, marking the first increase since November. The current conditions gauge dropped to the lowest since late 2022.

The improvement sentiment from earlier in the month reflected a pickup among political independents as well as Democrats. Confidence among Republicans eased.

Source: Bloomberg Europe

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Adam

Forex

Stocks

Nasdaq 100 comes off Thursday's high

The Nasdaq 100 is expected to remain below its four-month high at 21,611 on the last trading day of the month and may slip further over the coming days since this high has been accompanied by a lower high on the daily Relative Strength Index (RSI). It thus shows negative divergence which in most cases leads to at least a short-term correction against the prevailing trend.

The previous 21,464-to-21,483 resistance area, made up of the last couple of weeks' highs, may cap on Friday. 

A slip through Thursday's 21,261 low may put the 3 March high at 21,074 back on the plate. If slipped through last week's low and the April-to-May uptrend line at 20,778-to-20,734 may be revisited as well. Failure there would probably engage the 200-day SMA at 20,351. 

Further down lie the 21,073-to-20,975 late January-to-early March daily lows which may also offer support.

Were Thursday's high at 21,611 to be exceeded, the early January high at 21,703 would be eyed.

Nasdaq 100 comes off 4-month high while EUR/USD resumes ascent and WTI stays sidelined_1

EUR/USD recovers from Thursday's low

EUR/USD has bounced off Thursday's $1.1211 low and thus resumes its advance but is losing short-term upside momentum below last week's $1.1418 high. This level as well as the $1.1425-to-$1.1440 23-to-29 April highs need to be exceeded for the resumption of the medium-term uptrend to be validated. If so, the 11 April high at $1.1473 should be next in line ahead of the April peak at $1.1573.

While Thursday's low at $1.1211 underpins, the short-term uptrend is deemed to be intact. If fallen through, a slide towards the $1.1131 mid-May low may unfold instead.

Nasdaq 100 comes off 4-month high while EUR/USD resumes ascent and WTI stays sidelined_2

WTI still range trades

For the past few weeks the WTI crude oil price has been sidelined and remained below its late April-to-May $63.86-to-$64.83 per barrel highs but above its $60.11 mid-May low.

The lows seen since mid-May at $60.11-to-$60.06 act as floor for now. Failure there may lead to the mid-April low at $59.90 being back in sight, ahead of the 4-year April-to-May $55.39-to-$55.15 lows. These lows represent strong support, though.

A rise above Thursday's $63.04 high and the 55-day SMA at $63.23 may lead to the key $63.86-to-$64.83 resistance area being revisited.

At present further, mainly low volatile, sideways trading seems to be at hand.

Nasdaq 100 comes off 4-month high while EUR/USD resumes ascent and WTI stays sidelined_3

Source: ig

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Glendon

Economic

Forex

The Chicago Purchasing Managers’ Index (PMI), a key indicator of the economic health of the manufacturing sector in the Chicago region, has reported a lower than expected figure. The recent data reveals the actual figure to be at 40.5, well below the forecasted 45.1.

This number not only missed forecasted expectations but also fell short when compared to the previous PMI figure, which stood at 44.6. The drop in the PMI indicates a contraction in the manufacturing sector, as a reading above 50 suggests expansion, while a reading below 50 points towards contraction.

The Chicago PMI is a significant tool in understanding the economic climate as it can aid in forecasting the ISM manufacturing PMI. The lower than expected reading is likely to be viewed as negative or bearish for the USD. This is due to the integral role the manufacturing sector plays in the overall economy, and any contraction could signal potential economic slowdown.

The importance of the Chicago PMI is underscored by its two-star rating, marking it as a key event to monitor for those invested in the health of the manufacturing sector and the broader economy. The lower than predicted number will undoubtedly draw the attention of investors and economists alike, as they navigate the implications of this contraction in the manufacturing sector.

While the manufacturing sector continues to show signs of contraction, it remains to be seen how this will impact the overall economy in the coming months. The lower PMI reading, however, is a clear signal that the sector is currently facing challenges, and it may take some time to see a rebound.

In conclusion, the lower than expected Chicago PMI figure of 40.5 is a clear indicator of contraction in the manufacturing sector, falling short of the forecasted 45.1 and the previous figure of 44.6. This development could potentially impact the USD and the broader economy, warranting close monitoring in the coming period.

Source: Investing

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Adam

Forex

Australian retail sales show unexpected decline

Australia's retail sales contracted in April by 0.1% m/m, missing the market estimate of 0.3%, which was also the March reading. This was the first decline since December, weighed by declines in clothing and department store spending. Annually, retail sales rose 3.8%, compared to 4.3% in March.

The weak retail sales report points to a nervous Austrlian consumer and will support the case for further rate cuts. The Reserve Bank of Australia lowered rates by a quarter-point to 3.85% last week, only the second rate cut this year. The markets expect the Reserve Bank to be more aggressive and have priced in a cut of at least 75 basis points before the end of the year, which would lower the cash rate to around 3%.

Consumer spending and confidence remain weak and further rate cuts would boost consumption. However, US President Trump's zig-zag tariff policy has created huge uncertainty, making it difficult for the RBA to chart a rate path.

The US has imposed 10% tariffs on Australian products but even more concerning is the US-China trade war. The two countries agreed earlier this month to dramatically lower the tariff rates on each other but the agreement is only for 90 days. China is Australia's largest trading partner and a downturn in China's economy would damage Australia's export-reliant economy.

Federal court reinstates Trump's tariffs

The tariffs are winding their way through the US courts. A trade court panel ruled this week that most of Trump's tariffs were illegal but on Thursday, an appeals court granted the Trump administration a temporary pause, which keeps the tariffs in effect. The legal fight over the tariffs could go all the way to the Supreme Court and is causing even more uncertainty in the financial markets.