Oil Market Responds to U.S. Inventory Surprise and Geopolitical Developments:

Image Source : Krish Capital Pty Ltd

Index Update: The FTSE 100 index, a key benchmark index for the London stock exchange, went up around 0.17% on 31 July 2025.  

Macro Update: Investors are watching closely as key inflation data from France, Germany, and Italy come into focus alongside fresh labor market figures from Germany and the broader EU. The European Central Bank recently opted to keep its main interest rate steady at 2%, marking a pause in its ongoing easing cycle. This decision appears aimed at allowing more time to assess the evolving macroeconomic outlook, particularly in light of uncertainties surrounding trade dynamics with the United States. Meanwhile, the Federal Reserve also chose to maintain its current policy stance, leaving interest rates unchanged for the fifth meeting in a row. The move, supported by most committee members, included notable dissent from two governors—an unusual occurrence that hasn’t been seen in over 30 years. 

Top Market Movers: Among top gainers on FTSE 100 index, Rentokil Initial PLC (LSE: RTO) witnessed a rise of 10.56% followed by Rolls-Royce Holdings PLC (LSE: RR.) which gained around 10.32%. 

Commodity Update: The US dollar approached a two-month high on Thursday after Federal Reserve Chair Jerome Powell maintained a patient stance on interest rates, offering little guidance on potential rate cuts. Meanwhile, President Donald Trump’s softened copper tariffs pressured Comex premiums. Gold slipped 0.30% to $3,342.60 per ounce, silver dropped 1.73% to $37.09 per ounce, copper declined 0.40% to 9,679.45, and Brent crude rose 0.40% to $73.51 amid supply concerns and geopolitical tensions. 

Our Stance: Crude oil prices edged slightly downward as traders weighed a combination of factors, including a larger-than-expected rise in U.S. inventories and soft manufacturing data from China. Brent and WTI futures saw modest declines early Thursday, giving back part of the gains made a day earlier when comments from former U.S. President Trump about potentially imposing steep tariffs on Russian crude raised concerns over future supply disruptions. The latest U.S. Energy Information Administration report revealed a 7.7 million-barrel build in crude stockpiles, defying forecasts of a drawdown. Meanwhile, ongoing signs of subdued demand in China, the world's leading oil importer, continue to influence market sentiment. 

FTSE 100 

The FTSE 100 is currently trading at 9,115.35, down 0.23%, yet holding above a key breakout level that now serves as support. It remains above both the 21-day and 50-day Simple Moving Averages, indicating a stable short-term trend. The Relative Strength Index (RSI) stands at 66.82, suggesting strong momentum, though some minor consolidation may occur. A pullback toward the 8,700 level could unfold as part of a healthy correction. Despite this, the overall technical structure remains intact, reinforcing the ongoing trend and suggesting that the index may resume its upward trajectory following any near-term pause or retracement. 

FTSE 100 Technical Chart, Source - EODHD/Others