Oil eyeing triple figures after brief pullback
Oil prices are continuing to edge higher after a brief pullback last week. The move followed some turbulence at the start of the week and came as API reported an 872,000 barrel draw which exceeded expectations. Crude prices are once again closing in on USD 90 and at this point, it doesn’t look like we’ll be waiting long.
So immediately it becomes a question how long we’ll be waiting for triple figures. The supply/demand dynamics remain favourable and the potential for conflict in Ukraine can only be supportive, as additional risk premiums are priced in. It’s still unlikely that oil and gas will be used as a weapon any time soon but if it was, it could lead to a serious surge in prices given how tight the markets are.
Gold awaits Fed decision
Gold is continuing to hold up ahead of the Fed meeting, close to USD 1,850 where it has seen some resistance recently. The central bank will have a big role to play on whether the yellow metal breaks above here or below USD 1,830 support.
It has been rising recently even as the market has priced in four hikes and balance sheet reduction which may suggest we’re seeing some inflation hedging in case more tightening is needed. Risk aversion may also be supporting the gold price. Either way, we should have more clarity later today.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
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