Oil cautiously higher after mixed messages from UAE
Oil prices are rising again, up around 4% on the day at one point, as talks between Ukraine and Russia give little cause for optimism. The risk of further disruption remains high, especially with more sanctions to come that will make life harder for Russia and companies less keen to do business with them.
The one ray of hope comes from the UAE, following comments yesterday that suggested they favour higher output. That was tempered later, though, by the country’s energy minister who reaffirmed their commitment to the OPEC+ agreement, so who knows where that leaves us. One dissenting voice within the group could at least spark more discussion about the need for higher production, although I can think of one influential member that may fiercely oppose it.
Gold should remain supported and could take another run at the highs
Gold is hovering around USD 2,000 after plunging on Wednesday as part of the big risk-reversal we saw across the markets. It’s not made up an enormous amount of ground today, despite commodity prices heading higher and risk aversion sweeping through the markets once more.
While the talks today yielded no positive outcome and both sides still seem miles apart in their expectation, it seems the very fact that these discussions are taking place and at a high level is providing some hope. Gold should still remain well supported unless we see any real breakthrough and while it may have just failed at the first time of asking, record highs may not be far away.
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