Oil slips after API inventory report
The oil price rally has been losing momentum recently after making large gains over the last couple of months and Tuesday’s API inventory data may have been the catalyst for the start of the correction. Needless to say, crude oil has looked like an overcrowded trade over the last couple of weeks and has been running on fumes.
After API reported a surprisingly large build on Tuesday, WTI and Brent both fell and that has continued today, with prices down more than 1%. The EIA report piled further pressure on after reporting an even larger build but quickly recovered. Price may remain volatile for the rest of the session.
Any correction will likely be limited though by the tight energy markets we’re seeing and will continue to see over the coming months. The winter months may further squeeze supplies and as we’ve seen this past week, colder weather warnings will likely see prices spiking which will support prices in the near term.
Gold under pressure as US yield curve steepens
Gold continues to trade below USD 1,800 and the steeping yield curve appears to be dragging on the yellow metal as markets price in more action from central banks to address the “transitory” inflation they’re apparently not concerned about. The price movements continue to be choppy as traders wrestle with inflationary pressures, central bank expectations and a softer dollar.
The yellow metal finds itself caught between support around USD 1,780 – where a rising trendline over the last few weeks intersects a recent support zone – and USD 1,800-1,810. That range is narrowing which suggests a breakout isn’t far away, at which point we’ll have a better idea of the direction of travel.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
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