Oil News: Crude Oil Futures Hold Above 200-Day Average as Supply Risks Intensify

Commodity

Summary:

Crude oil held above $63.25 support as Russian supply risks offset OPEC+ output hikes. Geopolitical tensions and Fed rate-cut hopes lifted sentiment, but demand concerns and resistance near $65 cap gains.

Crude Oil News Today: Prices Edge Up as Supply Risks Offset OPEC+ Output Boost

Daily Light Crude Oil Futures

Light crude oil futures edged higher early Monday, building modest upside momentum after closing above the 200-day moving average at $63.25 on August 21. That level now acts as near-term support, while the rally faces immediate resistance at the 50% retracement level of $64.56, followed by the 50-day moving average at $65.00 and minor levels at $65.41 and $66.18.

On the downside, a break below the 200-day average would shift focus to the August 13 low at $61.12—a key trigger for downside acceleration below $60.

Geopolitical Risk Premium Builds on Russian Infrastructure Attacks

Traders remain alert to supply-side risks as Ukraine continues drone strikes on Russian energy assets. A weekend attack set fire to the Ust-Luga fuel export terminal, while the Novoshakhtinsk refinery—capable of processing 100,000 barrels per day—was still burning on Sunday. These incidents have added a layer of uncertainty to Russian exports just as the U.S. considers fresh sanctions.

President Trump reaffirmed Friday that additional penalties would be imposed if Russia fails to advance peace talks within two weeks. He also threatened tariffs on India over its continued imports of Russian crude. While U.S. Vice President JD Vance claimed Moscow had made “significant concessions,” the market appears unconvinced. Saxo Bank’s Ole Hansen said, “The market is somewhat concerned that these peace negotiations are going nowhere.”

OPEC+ Output Hikes Cap Upside Momentum

Tempering the bullish impact of Russian supply risks is the ongoing reversal of OPEC+ production cuts. With millions of barrels being added back to the market, and another supply boost likely at the September 7 meeting, bearish pressure remains in place. Hansen noted that while demand may soften into the autumn months, the bigger driver now is the ramp-up in supply.

Fed Rate Signal Lifts Risk Appetite but Demand Fears Linger

Market sentiment received a boost after Federal Reserve Chair Jerome Powell signaled a possible rate cut in September. While this supported broader risk assets, oil failed to catch strong momentum. Phillip Nova’s Priyanka Sachdeva pointed out that demand-side concerns—particularly the threat of Trump’s trade tariffs—are limiting gains and raising concerns over global growth.

Before making your next crude oil move, make sure you understand What Drives Oil Prices

Market Forecast: Watch Moving Averages for the Next Breakout

While geopolitical risks are giving bulls something to lean on, the broader tone remains neutral-to-bearish unless prices can hold above the 50-day moving average at $65.00. The 200-day moving average at $63.25 is now the pivot point. A decisive move above or below these levels will offer the next clear directional signal for crude oil traders.

Source: fxempire

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Glendon

Russia-Ukraine Conflict

Political

Key points:

Donetsk is gripped by severe water shortages
Russian-backed head has told Putin about the problem
Start of Soviet-era canal is on land controlled by Ukraine
Residents queue up at water trucks amid rationing

The head of the Russian-held Donetsk region in eastern Ukraine said a water crisis that is forcing people to queue at water trucks can only be fixed if Russia takes full control of the region, including a vital canal.

Donetsk is one of four Ukrainian regions that Russia claimed as its own in 2022 as part of what it cast as a defensive"special military operation",an assertion that Kyiv and most Western countries reject as an illegal land grab.

Moscow currently controls around 75% of the Donetsk region and Russian forces are meeting fierce Ukrainian resistance as they push to take the rest of it.

Severe water shortages in the chunk it does control, which local residents say make carrying out simple daily tasks difficult, have become a headache for Moscow, which wants to show its presence is improving people's lives.

A group of residents sent an open letter to Russian PresidentVladimir Putinlast month asking him to intervene in what they called "a humanitarian and ecological catastrophe", and Ukrainian commentators have pointed to the problem to criticise Russian governance.

Speaking to Reuters in the city of Donetsk, where he said tap water was only available for several hours every three days, Denis Pushilin, the Russian-installed head of the region, described the shortages as "sensitive."

Pushilin, who appeared on Russian state TV this month in a Kremlin meeting with Putin who was quizzing him about the shortages, said water tankers and repair crews from Moscow had been drafted in and a water pipe built to bring water from the River Don.

"(But) the situation is really difficult as it has no quick solutions,” he said.

The only way to fix the issue would be for Russia to take control of the rest of Donetsk, including a Soviet-era canal crucial for water supplies, he suggested.

WATER RATIONING

"The most and only important solution probably, and that's what the fighters are doing, is to liberate Sloviansk and nearby territories to be able to start restoring the Siverskyi Donets-Donbas Canal, which will fully supply the region with the necessary water," said Pushilin.

Built in the 1950s, the 83-mile (135-km)-long canal, which connects two rivers, starts about 12 miles northeast of Sloviansk, which is held by Ukrainian forces, and flows south finishing around 11.6 miles northeast of Donetsk city in an area controlled by Russian forces.

Pushilin said the water problem had become particularly acute this summer, forcing the authorities to introduce stricter rationing due to what he said was abnormal weather. "As a result... our reserve reservoirs are almost empty," he said.

Pushilin accused Ukraine of imposing "a water blockade," but Ukrainian officials say parts of the canal have been damaged in the war and other parts are located in front-line areas.

In Donetsk, Reuters saw residents queuing up at a water truck to fill up five-litre plastic bottles and petrol canisters with water before carting them away on trolleys or in their car boots.

“I am 78," said one pensioner who gave her name as Lyubov and was visibly upset. "How am I supposed to come here, collect water, and bring it back home? I need to go to the toilet and wash.”

Another woman, Irina, said no water had come through her taps at home for the last 12 days.

"Some people buy (bottled) water; some search for it in other places. Some people get water brought to them by people from a well and by car," she said.

At a reservoir outside Donetsk seen by Reuters, shallow rivulets of water pooled in the centre; other parts of it had turned to cracked chunks of mud.

Source: Reuters

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Adam

Economic

Shares in China Evergrande were removed from the Hong Kong Stock Exchange on Monday, marking another step in the retreat of the giant real estate developer whose downfall contributed to a prolonged crisis in China's property market.

Evergrande's creditors are still working to wind up debts that amounted to more than $340 billion. Once China's second-largest developer, it ran into trouble when Chinese regulators cracked down several years ago on what they deemed to be excess borrowing by developers.

That caused dozens of property companies to default on their debts, triggering a downturn in the property market that is still dragging on the world's second-largest economy.

Here's what to know about Evergrande:

The delisting of a one-time leader in China's property market

The Hong Kong Exchange said Monday that Evergrande's shares were delisted as of Monday morning, as expected. The shares were last traded on January 29, 2024, and then suspended after a court in Hong Kong ordered liquidation of the company when it failed to provide a viable debt restructuring plan.

Rules of the exchange stipulate that a company's share listing may be canceled if trading in its securities is suspended for 18 straight months.

Evergrande's role in China's property crisis

After years of warnings that led to global rating agencies cutting the Chinese government’s credit rating in 2017, the ruling communist party cracked down on real estate debt in 2020. It imposed controls known as “three red lines” that prohibited heavily indebted developers like Evergrande from borrowing more to pay off bonds and bank loans as they matured.

Fears of a possible Evergrande default in 2021 rattled global markets, but they eased after the Chinese central bank said its problems were contained and Beijing would keep credit markets functioning. Evergrande was one of the biggest of many developers that failed to repay their creditors.

Chinese home buyers often pay up front for apartments before they're even built. The credit crunch for Evergrande and other developers led them to suspend construction, leaving many projects in limbo. The slowing of home purchases and building rippled throughout the economy, hitting demand for construction materials, appliances and even vehicles at a time when China was also contending with disruptions caused by the COVID-19 pandemic.

Since most Chinese families have their wealth tied up in property, the anemic housing market has been a major factor crimping consumer spending.

The property downturn grinds on

There has been some recovery in the housing sector, but home prices and investment have continued to fall.

Before the crackdown on borrowing, real estate accounted for some 20% of China’s economy. When spending on steel and copper for construction, furniture and other related purchases was added in, estimates of its share of the economy rose to about a third.

China’s leaders have sought to get developers to finish projects and deliver apartments that already were paid for, providing billions in lending and subsidies. They’ve encouraged local governments to buy up excess apartments to serve as affordable housing, and relaxed down payment and mortgage requirements.

They've also lifted many restrictions on purchases of homes for investment purposes in major cities, a move that analysts at HSBC Global Investment Research described as “surprising” as they came earlier than expected.

Sales and home prices were expected to fall further in August, they said in a recent report.

“We think it’s a positive change showing government’s enhanced proactiveness in rolling out measures, which will help strengthen market confidence and address the concern on stimulus being too late,” it said.

Evergrande's status

Evergrande, headquartered in southern China's Shenzhen, near Hong Kong, was founded by entrepreneur Hui Ka Yan, who is also known as Xu Jiayin, in 1996. Its ascent and decline have mirrored the boom and bust in China's property market after housing reforms allotted apartments built by state-owned industries to employees, creating a nation of home owners.

The company's shares were listed in Hong Kong in 2009.

Evergrande filed for Chapter 15 bankruptcy protection in New York City in 2023, but that case was later withdrawn. Although a Hong Kong court ordered a winding up of the company's debts, more than 90 percent of its assets are on the Chinese mainland, making it difficult to enforce repayment to its creditors.

Its liquidators said in a recent progress report that they had received debt claims totaling $45 billion as of Jul. 31, much higher than the some $27.5 billion of liabilities disclosed in December 2022, and that the new figure was not final. They also had taken control of more then 100 companies within the group with collective assets valued at $3.5 billion as of Jan. 29, 2024.

So far, about $255 million worth of assets have been sold, the liquidators said, calling the realization “modest.”

Source: finance.yahoo

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Samantha Luan

Forex

Political

Economic

South Korea's new president, Lee Jae Myung, will face a pivotal moment on Monday when he meets U.S. President Donald Trump in Washington for their first summit, as the countries' decades-old alliance strains to confront rapid geopolitical changes.Much is riding on the meeting for Lee, who took office in June after a snap election called after his conservative predecessor - feted in Washington for his hard line on North Korea - was removed for attempting to impose martial law.

South Korea's economy relies heavily on the U.S., Washington underwrites the country's security with troops and nuclear deterrence, and Lee hopes to chart a balanced path of cooperating with the United States while not antagonizing top trade partner China.

South Korea has long come under targeted criticism from Trump, who has called it a "money machine" that takes advantage of American military protection.Lee will seek to make a good impression, connect personally with Trump, and above all, avoid any unpleasant surprises, analysts said."For Lee, a no-news summit I think would be good," said Victor Cha of the Center for Strategic and International Studies.

However, Cha said what Trump's aides produce for him to talk about at the meeting may be completely different from what President Trump wants to talk about.Under heavy pressure from Trump's administration, South Korean negotiators secured a last-minute deal last month to avoid the harshest of tariffs but must still hammer out details of billions of dollars in promised investments.South Korean officials say they hope such working-level trade negotiations will largely be left for other meetings.

"There are many major topics in the security field," Lee's top policy aide, Kim Yong-beom, said on Wednesday. "Our position is that trade was already finalised last time. We hope that specific implementation plans for trade won't be included in the summit at all, or at least should be kept simple if discussed."Several top officials, including the foreign minister, rushed to Washington over the weekend to try to iron out final details.

Lee, who arrived in Washington on Sunday, will highlight some of South Korea's expected investments when he visits a shipyard in Philadelphia owned by the country's Hanwha Group after the summit. Cooperation to help the ailing U.S. shipbuilding sector is part of the broad tariff agreement reached between the countries.Trump is expected to pressure Lee to commit to more spending on defense, including potentially billions of dollars more toward the upkeep of 28,500 American troops stationed in South Korea.

Wi Sung-lac, Lee's top security adviser, said South Korea was in talks with Washington on Seoul's higher defense spending, taking as a reference NATO's agreement on a big new defense spending target. Wi added that the government was also looking into a plan for the purchase of American weapons.

Duyeon Kim, from the Center for a New American Security, said to avoid any public splits, the leaders should focus on reaffirming long-standing alliance principles and broadly agreeing to expand cooperation in all areas.While focusing on increasing military spending, Lee will likely seek to avoid conversations about a potential reduction of U.S. troops or using them for a wider range of operations, or details on modernizing the alliance, she said."They should leave those topics for working-level officials to hash out," Kim said. "Ambition could backfire."

Lee said it is difficult for Seoul to accept the demand by the United States to adopt "flexibility" of operating the U.S. military now stationed in South Korea, Yonhap news agency reported on Monday.Trump and Lee may also discuss efforts to persuade North Korea to freeze and eventually abandon its nuclear weapons programme. Both leaders support engaging Pyongyang, and Lee has called for a phased approach to denuclearization.But North Korea has rejected both American and South Korean overtures so far, and said it will never give up its nuclear arsenal. Leader Kim Jong Un has said the U.S. and South Korea remain hostile to his country and he supervised test firing of new air defence systems over the weekend.

Before Lee meets Trump, the South Korean leader travelled to Tokyo to meet Japanese Prime Minister Shigeru Ishiba on Saturday to underscore the importance of cooperation between South Korea, Japan and the U.S.Lee and Ishiba discussed relations with Washington and U.S. tariff issues and the Japanese leader shared his experience with Trump, which for Seoul was useful information before Lee's first meeting with Trump, said Wi, the South Korean security adviser.

Source: Reuters

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Adam

Stocks

U.S. stock index futures fell modestly Monday pre-market trading after Wall Street rallied sharply on dovish comments from Federal Reserve Chair Jerome Powell, which heralded interest rate cuts in the near-term.

Focus this week is squarely on earnings from artificial intelligence major NVIDIA Corporation (NASDAQ:NVDA), for more cues on the fast-growing industry.

Wall Street rallied on Friday, reversing a bulk of recent losses as investors ratcheted up bets that the Fed will cut interest rates in September.

S&P 500 Futures were down 0.24% to 6,451.25 points, while Nasdaq 100 Futures fell 0.32% to 23,424 points by 06:17 ET (10:17 GMT). Dow Jones Futures were seen down by 0.22% trading at 45,532.0 points.

Powell signals potential rate cut, Wall St rallies

Powell, speaking at the Jackson Hole Symposium on Friday, said the central bank could possibly cut rates in September amid increasing risks to the labor market.

But the Fed Chair warned that the decision was not set in stone, especially as risks from inflation remained. Fed policymakers have repeatedly cited uncertainty over the inflationary impact of President Donald Trump’s trade tariffs.

Still, Powell’s comments were relatively dovish when compared to recent signaling from the Fed, and saw markets ramp up bets on a September rate cut. Wall Street indexes also rose sharply following his comments, reversing most of last week’s losses.

The S&P 500 rose 1.5% to 6,466.91 points on Friday. The NASDAQ Composite rose 1.9% to 21,496, while the Dow Jones Industrial Average rose 1.9% to a record-high 45,631.74 points. The US Small Cap 2000 surged 3.9% on Friday after Powell’s speech.

"Small Caps run the risk of seeing only a short-lived outperformance trade once again, particularly if the economic concerns that appeared open the door for a September cut ultimately come to fruition," RBC strategist Lori Calvasina wrote in a note.

Markets are now pricing in a ~89% chance of a 25bp rate cut in September, followed by a 49% chance of another 25bp cut in December.

Nvidia awaited for more cues on AI

Focus this week is squarely on second-quarter earnings from AI major NVIDIA Corporation (NASDAQ:NVDA), which are due on Wednesday.

The company is widely regarded as a bellwether for AI demand, and is expected to mostly log another strong quarter.

But focus will be on the company’s China sales, which are likely to have fallen further amid brief U.S. export curbs and increased Chinese scrutiny towards AI chips. Nvidia was seen halting production of its China-specific H20 chip last week.

Nvidia’s earnings also come following an extended rout in tech shares, as investors questioned just how profitable the AI industry will remain in the coming quarters.

Outside Nvidia, Dell Technologies Inc (NYSE:DELL), Dick’s Sporting Goods Inc (NYSE:DKS), Best Buy Co Inc (NYSE:BBY), Dollar General Corporation (NYSE:DG), and Abercrombie & Fitch Company (NYSE:ANF) are also set to report earnings this week.

Second-quarter gross domestic product data is also on tap this week, coming after preliminary data released in late-July showed strong growth.

Source: investing

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Michelle

Economic

Forex

August 25 - Brokerages are adding a September rate cut to their forecasts after Federal Reserve Chair Jerome Powell signaled the central bank could ease policy next month.

Deutsche Bank, BNP Paribas and Barclays pulled forward their rate cut forecast to September after Powell emphasized increasing risks to the labor market at the Jackson Hole economic symposium on Friday."We continue to believe that monetary policy must be forward-looking and consider the lags in its effects on the economy," and that the Fed must balance risks to both its job and inflation mandates when setting monetary policy, Powell said.Last month, the U.S. central bank held interest rates steady and maintained its projection for two cuts this year and slightly dialed back its outlook to just one 25-basis-point cut in both 2026 and 2027.

Traders are pricing in 52.3 bps in rate cuts by year-end, according to data compiled by LSEG. They are penciling in about an 83.3% chance of a 25-bps cut in September, according to the CME Group's FedWatch tool.

The rate-setting Federal Open Market Committee is scheduled to meet again on September 16 and 17.

Source: Kitco

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Adam

Forex

The New Zealand dollar has steadied on Monday. In the European session, NZD/USD is trading at 0.562, down 0.07% on the day. On Friday, the New Zealand dollar shot up 0.82%, its best one-day performance since June.

US dollar sinks after Powell's signals a rate cut

The US dollar was hammered on Friday, posting sharp losses against all the major currencies, including the New Zealand dollar. This followed Federal Reserve Chair Powell's dovish speech at a meeting of central bankers' in Jackson Hole.

Powell did not explicitly say that the Fed would cut rates next month and noted that inflation remained a risk due to tariffs. He expressed concern about the labor market, saying that "downside risks to employment are rising" and such risks could materialize quickly.

The markets focused on Powell's warning about the employment outlook and bumped up expectations that the Fed will cut rates at the September 17 meeting. As well, a second cut before the end of the year is a strong possibility.

The Fed has been in a prolonged wait-and-see stance, holding rates since December 2024. With inflation largely under control and the labor market showing wider cracks, the Fed is likely to respond with a rate cut or two before the end of the year.

New Zealand retail sales rise to 0.5%

New Zealand's retail sales for the second quarter rose by 0.5% q/q, down from 0.8% in Q1 but above the market estimate of 0.2%. Annually, retail sales jumped 2.3%, up sharply from 0.7% in Q1. The positive release indicates that consumers are spending in response to lower interest rates. The Reserve Bank of New Zealand has aggressively chopped rates and has hinted that the easing cycle will continue.