The new day began steadily with Jul’23 trading either side of 26.00, the market again showing some impressive strength to maintain prices considering the scale of this week’s movement. From this base it was not long before some exploratory moves higher were being made, this latest low volume move seeing Jul’23 reach 26.38 to mark a new contract high for the sixth successive session before easing back into the range to consolidate for the remainder of the morning. The continuing inactivity from larger funds has significantly reduced the impact of the early afternoon period, and so with buyers taking a back seat (temporarily at least) prices eased further back to show a rare burst of red on the screens as some long liquidation and algo selling sent the price back to 25.66. With Jul’23 now taking all the non-expiry activity we saw May/Jul’23 strengthen out to 0.73 points through this period, with the spread remaining firm even when the market mounted a recovery back to 26.09 midway through the afternoon. Unusually this did not need to another price spike higher with prices soon slipping back to the negative where they were to remain for the final stages to post a rare lower close. Jul’23 settlement was reached at 25.78, a moderate loss which in the context of the recent strength maintains the positive technical picture.
There was some early volatility for the whites as prices chopped around between $701.50 and a marginal new contract high $711.80 through the first couple of hours. The sentiment was still positive with the dips quickly being picked up however the Aug/Oct’23 spread was confounding this sentiment with a fall to $10.00 which bucks the wider trend. Prices slipped back to the lower end of the range ahead of the US day commencing, and with no new impetus coming through there were further losses incurred that saw Aug’23 back to $695.00 by mid-afternoon. Some correction following the moves to new highs is to be expected, particularly given the scale of gains o0ver the past four weeks, though the further narrowing of the Aug/Oct’23 spread to $9.10 through the afternoon does raise some questions over whether the scale of recent gains can be maintained. Much of the recent strength has occurred through the later part of the day and a recovery to $702.80 suggested we may be seeing another end of day push, however on this occasion it was not to be, and prices slumped back to register new session lows ahead of the call. Aug’23 saw some light MOC buying to settle at $695.10, though the lower finish does little to change the technical picture which remains firm.
