Oil sees near term support from outages
Oil prices are 1% higher again on Tuesday, adding to Monday’s strong gains which came following a flurry of bullish news for crude.
Trump’s return from hospital was generally supportive of risk appetite and gave oil a kick higher, while strikes at six Norwegian offshore oil and gas fields has hit output by around 330,000 barrels of oil evuivalent per day, or 8% of total production.
It’s been an intense hurricane season already and we’re now well into the greek alphabet with eight weeks still to go. Hurricane Delta is rapidly intensifying as it enters the Gulf and oil companies are already beginning offshore evacuations in the region that accounts for 17% of US crude oil production.
WTI is approaching $40 again and while near-term risks seems tilted to the upside, they will pass and the prices could quickly tumble once again.
Gold still looks bearish, despite recent recovery
Gold is pretty flat today but holding above $1,900 which bulls will be encouraged by.
While I’m a longer term bull, I’m far from enthused. The rally is really struggling to gather momentum and while a close above $1,900 was a promising sign, I’m not yet sold. I think some more near-term downside may be on the cards and the reluctance we’re seeing in the recovery rally isn’t changing my view on this.
We’ve seen some paring back but I feel we’re poised for some risk aversion in the coming weeks and right now, that doesn’t favour gold.
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