Oil pushing post-summer highs
Oil prices are edging higher again today after ending a little flat on Tuesday. There wasn’t much to take from the JMMC virtual meeting, with the group not offering any recommendations of production changes, meaning we’re left waiting until December to see what will happen in January.
The two vaccine announcements have removed any urgency to act, with crude prices soaring more than 20% from this month’s lows before settling comfortably above USD40. That is perfectly acceptable for producers in the OPEC+ group for now and, should they remain above these levels, may allow for production increases in January, as planned. Of course, that will also depend on how the rate of infections progresses under the latest lockdowns in Europe and restrictions in the US.
WTI is pushing USD42 again this morning, where it has met fierce resistance on multiple occasions over the last couple of months. The one exception being last week when it briefly surged above here before ending the day back below. Brent is pushing above USD44 this morning and pushing the upper end of its post-summer ranges. The upside pressures are continuing to build.
Gold consolidates after paring losses
Gold appears to have fallen into a range between USD1,850 and USD1,900 over the last week after coming under considerable pressure in response to the vaccine news. The yellow metal is suddenly looking very vulnerable despite seeing some reprieve as US yields and the dollar corrected themselves.
A little over-excitement in the immediate aftermath of the vaccine announcement has been met with a little more perspective now as the dust has settled. More vaccine announcements could continue to pile the pressure on gold though in the short term but beyond that, it could still perform well if the dollar remains under pressure.
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