WTI Oil Rebounds As Saudi Energy Minister Says OPEC+ May Cut Production

Key Insights

• WTI oil found support after Saudi minister indicated that OPEC+ may reduce production if demand falls. 
• Natural gas moved to new highs as traders focused on the strong rally in the European natural gas markets. 
• Palladium was hit hard amid worries about demand from the auto industry. 

Today, some commodity markets were under pressure due to recession worries. However, WTI oil and U.S. natural gas prices managed to move higher as they had strong catalysts.

WTI Oil Gains Ground As Saudi Arabia Signals It May Cut Production If Necessary

Today, worries about the strength of the oil demand in the second half of the year pushed WTI oil towards multi-month lows. However, WTI oil managed to rebound and moved back above the $90 level after Saudi Energy Minister indicated that OPEC+ may cut production if demand declines.

Traders also continued to monitor the news on the Iran nuclear deal. There are some indications that progress is possible. However, everyone is waiting for clues from the U.S. The nuclear deal story may serve as the limiting factor for any sustainable upside move in the oil markets this week.

Natural Gas Tested The $10.00 Level

Natural gas markets rallied today as Europe’s energy crisis worsened after Russia’s Gazprom announced that it will halt supplies via Nord Stream 1 for three days, starting from August 31.

Technical factors may be in play in the upcoming trading sessions as traders may want to take some profits off the table after the strong rally. Meanwhile, traders will continue to monitor the developments in Europe and wait for the release of the EIA report on Thursday.

Gold Slides As Treasury Yields Rise

Gold remained under pressure as the yield of 10-year Treasuries moved above the 3.00% level. Higher yields are bearish for gold and other precious metals that pay no interest.

Recession worries had additional negative impact on silver, platinum, and palladium. The pressure on palladium was especially strong as Ford announced significant job cuts. Traders are worried that reduced demand for cars would hurt demand for palladium, which is used in catalytic converters.

Copper Markets Stay Resilient Despite Recession Worries

There was no sell-off in copper markets despite recession worries. This is an interesting development as copper is usually sensitive to changes in the economic outlook.

The upside trend in copper markets remains intact, and today’s price action is a good sign for the bulls. If copper manages to hold near current levels despite the current global market sell-off, it will have a good chance to move to new highs at the end of this month.

For a look at all of today’s economic events, check out our economic calendar.