Oil rally continues
Crude prices got another vote of confidence from an EIA crude oil inventory report that showed the demand recovery is accelerating. Last night’s API data showed a weekly decline of 7.7 million barrels, so that took some of the oomph out of today’s EIA headline draw of 7.99 million barrels. US production remained below 11-million barrels and refiner utilization is now at post-pandemic highs.
A bullish EIA crude oil inventory sent Brent crude higher but was unable to break the psychological USD70 level. The path higher for oil is there; energy markets just need to see that the situation in India does not worsen over the next couple of weeks.
Gold prices survived Treasury Secretary Yellen’s miscommunication on interest rates and could be making another attempt at cracking the USD1,800 level. Gold prices are strengthening after Treasury yields pared an advance that stemmed from a knee-jerk reaction to the refunding announcement that contained a warning that US debt-limit tools could run out faster.
A round of Fed speak from Evans and Bowman also provided some support for gold. Evans noted that the risk of spiraling inflation was remote still and Bowman noted she won’t be overly concerned by the brief rise to 3% inflation. The Fed’s ultra-accommodative stance is confirmed and a mixed global economic recovery is just what gold needs to join the super commodity cycle party.
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