Commodities Wrap 6 August: Brent Jumps 3.8 Percent as Oil Claws Back Losses

By The Edge Research Team

Crude oil surged on Thursday 6 August, with Brent jumping 3.84 percent to 82.50 dollars a barrel and West Texas Intermediate rising 2.77 percent to 77.30 dollars, per CNBC, as the energy complex clawed back a substantial part of the ground lost in the heavy selling that followed the OPEC+ decision on September output. The metals rally paused, with gold flat and silver easing, leaving oil as the week’s third distinct commodity story in as many days.

The recovery in energy was broad and product-led on the way up, just as the selloff had been on the way down. RBOB gasoline jumped 3.48 percent to 2.9376 dollars a gallon and heating oil rose 2.13 percent to 3.8770 dollars, per CNBC, while natural gas was the complex’s exception, easing 1.82 percent to 2.639 dollars per million British thermal units. With Thursday’s move, Brent has recovered to within about 6 percent of its level before the OPEC+ announcement, our calculation, after a slide of roughly 10 percent across Monday and Tuesday.

Precious metals consolidated after two days of strong gains. Gold was little changed at 4,306.40 dollars an ounce, holding above the 4,300 line, while silver eased 0.86 percent to 61.75 dollars and platinum slipped 0.42 percent to 1,739.60 dollars, per CNBC. Palladium added 0.39 percent to 1,375.50 dollars and copper edged 0.10 percent higher to 6.734 dollars a pound. The pause came as Treasury yields reversed higher across the curve, with the ten-year up about 6 basis points to 4.674 percent, removing part of the tailwind that had powered the metals earlier in the week.

Agriculture was mixed. Sugar led, rising 2.84 percent to 15.58 cents a pound, with rough rice up 1.07 percent, corn 0.27 percent, soybeans 0.23 percent and cotton 0.10 percent, per CNBC. On the downside, cocoa fell 2.87 percent to 5,829 dollars a tonne, extending its retreat from Monday’s surge, while wheat dropped 1.83 percent to 630.5 cents a bushel and coffee eased 1.03 percent.

Across the wider markets, the dollar firmed, with the Dollar Index up 0.27 percent at 99.943, while the euro slipped to 1.1522 dollars and the yen weakened to 158.38 per dollar, per CNBC. Treasury yields rose across the curve ahead of Friday’s July jobs report, with the two-year at 4.252 percent and the ten-year at 4.674 percent. The CBOE Volatility Index fell 3.35 percent to 15.28, and Bitcoin eased 0.67 percent to 64,414 dollars. The Egyptian pound firmed to 49.64 per dollar, its strongest of the week.

Why it matters: Oil’s recovery is the week’s most consequential development for the region. Brent back above 82 dollars, within about 6 percent of its pre-OPEC+ level, substantially restores the near-term revenue picture for Saudi Arabia, Kuwait, the United Arab Emirates and Oman that Monday’s and Tuesday’s slide had clouded, and it does so just as the Gulf’s trading week closes, setting a firmer tone for Sunday’s regional open. Gold holding above 4,300 dollars keeps the week’s gains in the value of regional central banks’ holdings intact even as the metals pause. The offset is in rates: yields rising ahead of the jobs report firm the dollar and nudge financing costs, and for Egypt and Jordan the rebound in crude trims part of the import-bill relief of recent days, though the Egyptian pound’s continued firmness at 49.64 cushions that for Cairo.

Outlook: Friday’s July United States jobs report at 8:30 AM Eastern Time is the pivot for the whole complex, our reading. A soft print would pull yields back down and re-energise the metals, while a strong one would extend Thursday’s firmer-dollar, higher-yield mix and test gold’s hold on 4,300 dollars. For oil, the question is whether the recovery consolidates above 80 dollars on Brent, which would confirm that the market has absorbed the OPEC+ September increase, while natural gas remains the complex’s soft spot. We will carry the next wrap after Friday’s close alongside the week’s final sessions.

Data note: commodity levels are CNBC late-session snapshots on the day’s active contracts, not a single uniform exchange settlement, and the rate, currency and cryptocurrency figures are timestamp-sensitive.

Table Energy, 6 August, ranked by change:

Table Metals, 6 August, ranked by change:

Table Agriculture, 6 August, ranked by change:

Table Rates, currencies, volatility and crypto, 6 August:

Sources: CNBC.

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