Oil edging higher again as NATO questions Russian withdrawals
Oil prices are trending higher again on Wednesday, despite tensions in Ukraine appearing to ease. They spiked late on Friday and at the start of the week as the perceived risk of a Russian invasion increased, threatening to impact supplies in an already extremely tight market.
While crude has pulled back from the highs as Russian troops began leaving the border – NATO remains unconvinced by those assurances – the market remains extremely tight and prices had been on an upward trajectory prior to the escalation. The softening of tensions may have only delayed the march to USD 100, rather than preventing it. API reported a small drawdown last week which is roughly in line with what’s expected from the EIA report later today.
Gold remains supported as inflation continues to beat expectations
Gold is trading a little higher again today and above USD 1,850 where it has dipped below over the last 24 hours. This is the first big test of support, with it having been a major barrier of resistance in January. If it can hold above here, we could see it target yesterday’s highs again in the coming days and weeks even as the risk of a Russian invasion declines.
The yellow metal continues to be supported by rapidly rising inflation even as markets price in more and more rate hikes from central banks. Another above-consensus reading from the UK this morning shows the trend is not improving as we near the peak over the next couple of months. Gold could remain well supported for a while yet.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
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