Energy & precious metals - weekly review and outlook

investing.com:

Investing.com — Ahead of Friday’s OPEC meeting, which oil bulls are counting on to intensify the group’s mantra on production cuts and crude’s five-week rally, what the U.S. government reveals on inventories might be more telling.

Since the Saudis announced they will take an additional million barrels per day off their production this month — on top of other cuts by the broader OPEC+ group — crude draws reported on Wednesdays by the U.S. Energy Information Administration, or EIA, have been modest, to say the least.

While no one expects a barrel-for-barrel correlation between changes in Saudi exports and U.S. crude balances, the weekly EIA reports should start showing sharper stockpile drops if the narrative of the super tight market for oil is to hold up.

According to regional data from Middle Eastern-based JODI, Saudi exports fell below 7 million barrels a day in May. If true, that would be a first in a long time for a country that for years rolled out between 9 million and 10 million barrels daily.

Due to its unparalleled disclosures and transparency, the EIA’s numbers matter more for oil market optics at times than data released by any peer agency. With just a week’s data unreported for July, the EIA’s numbers show U.S. crude inventories in a net build of 4.638M barrels over the past three weeks.

“I agree that just two or three weeks of data isn’t indicative of much but I’d be very surprised if the EIA reports another anemic number for crude draws in the coming week or, worse, a build,” said John Kilduff, partner at New York energy hedge Again Capital.

“We have a near 15% rally in the flat price of oil for this month because the market has given the benefit of doubt to the production pledges made by OPEC,” adds