Commodities and Cryptos: Crude’s wild ride, Gold rallies, Bitcoin edges higher

Oil

Crude prices initially rose as the Ukraine-Russia conflict persisted and as short-term supply issues remained. Energy traders were fixated over the move above $100 for the Dated Brent benchmark. The oil market is getting tighter and oil prices seem like they are only going to go higher. 

The EIA crude oil inventory report posted a surprise build of 1.12 million barrels, the consensus estimate was for a draw of 919,000 barrels, while the prior week had a 4.8-million-barrel decline. US production remained steady at 11.6 million barrels. Rig counts are rising and production will increase shortly as the arctic blast that hit large parts of the country has passed.

Crude prices settled lower after Iran’s Nuclear Top Negotiator Kani tweeted, “After weeks of intensive talks, we are closer than ever to an agreement; nothing is agreed until everything is agreed, though. Our negotiating partners need to be realistic, avoid intransigence and heed lessons of the past 4yrs.”

Crude prices were not ready for a run towards $100 and the tweet from Iran’s top negotiator was used as the excuse for the small decline.  For oil prices to rally above $100, Russia-Ukraine tensions need to intensify or crude output needs to continue to fall short of rising demand. 

Gold

Gold prices are rebounding as geopolitical risks quickly return and fears of aggressive Fed tightening are somewhat pushed back.  Earlier gold rallied after US Secretary of State Anthony Blinken said on Wednesday in an interview on MSNBC that the US has not seen any pullback of Russian forces from the Ukrainian border.  The de-escalation that prompted a rebound with risk appetite quickly evaporated.

Gold is starting to look very attractive as geopolitical risks will likely persist for quite some time and uncertainty over Fed tightening will remain a theme for the upcoming meetings.

Bitcoin

Bitcoin is trading like a risky asset and will continue to take a cue from the stock market. Bitcoin should continue to attract investors as long as the $40,000 level holds over the short-term. 

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.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya