Oil slips as IEA releases details of SPR release
Oil prices are edging lower again on Wednesday as the IEA confirms the details of the coordinated reserve release that will aim to stabilise crude markets. The 120 million barrel release includes 60 million from the US which is part of the 180 million it announced last week. In other words, non-US countries have committed to 60 million barrels, taking the total release including the US to 240 million barrels.
Whether that will be enough will depend on how much Russian oil is effectively shut in as a result of export challenges since the imposition of sanctions. Many European countries are continuing to push for a total embargo of Russian energy, including gas, but continue to face resistance from Germany and a few others.
While that remains an upside risk for prices, the bloc is still far away from firm action as it hasn’t even been able to approve a coal ban which should theoretically be more straightforward. Today’s decline has been aided by reports that the CPC pipeline will increase shipments once the maintenance is completed in mid-April which will offer further mild relief.
Gold steady amid broader market volatility
Gold remains in consolidation ahead of the Fed minutes, with the moves in yields not yet spooking traders against the backdrop of immense uncertainty and high inflation, both of which favour the yellow metal. It’s been trading in an ever-tightening range over the last week and I’m not sure what it will take to break it out of that pattern. While volatility has picked up elsewhere, gold has remained very steady.
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