It has been a decent start to the month of February, after a difficult opening month of the year, with Europe ending the day up around 1% and US stocks also enjoying modest gains.
Mining stocks are the latest beneficiaries of the Reddit frenzy but the gains are more widespread than just these stocks. Of course, stock markets are coming off a tough start to the year, in particular the last few weeks, so we may just be seeing a little bit of reprieve led by the miners.
I guess we’ll see over the coming days just how much sentiment has improved but I’m not particularly optimistic. It will obviously be fascinating to see which area of the market Reddit traders target next and what the knock-on effects will be elsewhere. This at times over the last week or two appears to have contributed to the risk-aversion but we’re not seeing much of that today.
Oil remains in consolidation
Oil prices are making small gains on Monday, in line with the more positive risk appetite in the markets. Broadly speaking there’s no change, with the crude market still in consolidation after an impressive couple of months. We could see a bit of a pullback in the coming weeks without being any cause for concern but for now, WTI looks poised to settle in the USD51.50 to USD54 range.
Should the near-term demand outlook change in the coming weeks, as the vaccine rollout continues, we may see a shift but OPEC+ has shown itself to be very reactive to the situation over the last year and I don’t expect that will change. The biggest risk continues to come from US shale.
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