Oil ends higher as Powell’s Fed policy comments lift prospects for U.S. demand

• Crude Oil

Oil ends higher as Powell’s Fed policy comments lift prospects for U.S. demand: Oil futures settled higher Friday, extending a bounce from the previous session, after comments from head of the Federal Reserve confirmed prospects for interest-rate cuts that would help strengthen the economy – and demand for crude.

Halliburton Hit by Cyberattack: Oilfield-services company Halliburton has joined the growing ranks of firms hit by cyberattacks.

Democrats Call for the Elimination of Billions in Oil and Gas Subsidies: In a reversal from 2020, the party supports clawing back tax breaks for fossil fuels.

U.S. Crude Oil Stockpiles Fall More Than Expected: U.S. crude oil inventories dropped more than expected last week as refineries increased their capacity use, according to data released by the U.S. Energy Information Administration.

• Gulf Markets

The ADX General is advancing slightly to 9,382.55 in Abu Dhabi in early trading. International Holding Co. PJSC contributed the most to the index gain, increasing 0.2%. Fujairah Cement Industries Co. had the largest increase, rising 3.6%.
The DFM General Index opened 0.2% higher at 4,302.11 in Dubai. Emaar Development PJSC contributed the most to the index gain, increasing 1.4%. SHUAA Capital PSC had the largest increase, rising 1.7%.
The Tadawul All Share Index opened 0.5% higher, climbing 56.8 to 12,319.44, as stocks gain for the 10th straight day in Riyadh. In early trading, telecommunications stocks led the market higher, as 14 of 20 sectors gained; 102 of 238 shares rose, while 100 fell.
Oil advanced after an Israeli strike on Hezbollah targets in southern Lebanon raised tensions in the Middle East.

Global benchmark Brent rose toward $80 a barrel, while West Texas Intermediate climbed past $75. Israel sent more than 100 warplanes to take out thousands of Hezbollah missile launchers on Sunday, after which the militant group responded by firing more than 200 projectiles that did limited damage, according to Israeli officials.

• Gold

Gold rose by 0.17% today, extending the surge made on Friday after Fed Chair Powell hinted at a potential rate cut in the September meeting. Philadelphia Fed President Patrick Harker has also expressed support for two or three rate cuts in 2024, while Chicago Fed President Austan Goolsbee noted that the current monetary policy is highly restrictive, with a shift in focus toward employment goals. It must be noted that, though Powell’s stance at the Jackson Hole Symposium was dovish, he left some uncertainty regarding the size of the rate cut, indicating that it would depend on upcoming economic data and the balance of risks. According to CME’s Fedwatch tool market, participants are pricing at a 61.5% probability for a 25-bps rate cut and a 38.5% probability for a 50-bps rate cut in the September meeting.
 
From a technical perspective, the commodity bounced after retesting the breakout of trendline resistance last week, indicating bullish momentum. However, the metal faces critical downward trendline resistance around the $2,516 price mark. If broken, gold could reach previous all-time highs at $2531. On the downside, immediate support is found at $2,500. However, if selling pressure increases, a break below $2,500 could lead to a further drop, with the next support level around $2,486.

Expected Trend: Bullish

Gold prices in the UAE for the day (morning) are as follows:
24 Carat AED 304.00
22 Carat AED 281.25
21 Carat AED 272.50
18 Carat AED 233.50
 

Last Updated on 5 months by News Desk 1