Commodities and Cryptos: Oil consolidates, Gold pares weekly gain, Bitcoin streak ends

Oil

Crude prices are giving back some of this week’s gains as delta variant concerns refuse to ease and as risk appetite sentiment deteriorates.  Oil was unfazed from incremental comments from Russian Deputy Prime Minister Novak nor quarterly earning results from oil giants Exxon and Chevron.  Novak, the former energy minister, noted that the OPEC+ output increase of 400,000 bpd each month is adequate, slight posturing ahead of the next meeting over output.

Exxon and Chevron both reported earnings and their guidance supported the argument that this market will remain tight.  Chevron’s earnings slides noted that in the Permian, even with our reduced activity levels, production is expected to be comparable to last year.  Exxon’s production was 3.582 million bpd, a 15-year low, which was less than the analysts’ forecast of 3.683 million.

Big oil is not ramping up spending in news wells and focusing on debt reduction, which should keep OPEC+ happy with their steady plan of increasing output.  OPEC+ is not losing market share to the US, which should mean the oil market is still poised to go much higher.

Gold

Gold’s great week is ending on a down note, but bullion bulls are probably feeling pretty optimistic.  Gold appears to be close to triggering technical buying following the aftermath of the Fed, persistent delta variant concerns, and depressed global bond yields.  The biggest risk for gold is a blockbuster nonfarm payroll report that is well above the 1-million level.  As long as the Fed seems to be struggling to reach their substantial progress over the labor market recovery, the stimulus trade should be alive and well for gold.

Gold is consolidating between its’ 50- and -100 day SMAs, but that should prove temporary given the bullish factors for Treasuries.  If gold can clear the $1,850 level next week, prices might not have much difficulty making a run towards $1,900.

Bitcoin

After the longest winning streak in 2021 and rallying towards the top of the recent two-month trading range, Bitcoin was poised for a pullback.  Today’s Bitcoin decline appears to be modest and unlikely to trigger anything but a buying opportunity for fund managers.  Retail interest is strong, while institutional interest is somewhat lagging and needing fresh endorsements.  Bitcoin volatility might remain elevated over the weekend and traders should not be surprised if a spike occurs towards the$42,000 level during some illiquid times.

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