Oil gathering momentum as USD 100 oil looks increasingly likely
Oil prices are continuing to climb on Wednesday and find themselves only a little shy of USD 90 a barrel. This happened as IEA confirmed that the market looks tighter than previously anticipated as a result of stronger demand, despite omicron, and the inability of OPEC+ to hit its monthly increased production targets. This imbalance has led to surging prices which will further pressure households and businesses already fighting high inflation.
What’s more, not only does the rally not appear to be losing steam, it may have even generated fresh momentum. While USD 90 could have triggered some profit-taking and a minor cooling of prices, this suggests they’ll see no reprieve and we could realistically see USD 100 oil soon.
Can gold break higher as traders speculate about more rate hikes?
Gold is marginally higher again after the easing over the course of the last week. The yellow metal is continuing to struggle around USD 1,833 which has been a surprisingly strong level of resistance over the last six months. But support is returning after it came close to USD 1,800 so a break to the upside remains a strong possibility.
Given the calls for even more rate hikes this year than markets are pricing in, not to mention larger individual increases than we’ve seen for many years, perhaps we are seeing some inflation hedging from traders that don’t think central banks are doing enough to bring price pressures down.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.