Oil powers higher
All the headlines suggest oil prices will continue to go higher. Global energy supplies will continue to get tighter now that both the US and UK will ban Russian oil. The US took it one step further and also will ban Russian natural gas and other energy sources. Russia’s economy will take a big hit as the West shows unity and intensifies its sanctions against the Kremlin. The crude supply outlook will struggle to make up for Russian supplies over the next few months, so whatever pricing dips occur could be short-lived.
Crude prices pared earlier gains after President Biden confirmed that “Russian oil will no longer be acceptable at US ports.” Oil prices had quite a run and some exhaustion has tentatively settled in after Biden’s remarks on Russian sanctions. Energy traders may need a fresh catalyst to send WTI crude above the USD 130 level, but the overall consensus is still that oil prices can head much higher.
Gold prices surged as surging oil prices had Wall Street worried that a recession could happen a lot sooner than anyone was expecting. The latest developments in the West’s fight against Russia was that the US would ban Russian oil, LNG, and coal. The economic pain that will hit the Russian economy will likely see a retaliation from Russia, which will put the pressure back on the Europeans. Europe heavily relies on Russian energy and that will likely mean they will continue to have a phased-in approach to its dependency on Russian supplies.
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