Oil rallies, gold remains vulnerable

Oil higher while gas volatile amid Ukraine force majeure

Oil prices are rallying on Wednesday after briefly dipping below USD 100. WTI fell back to around USD 98.20 before recovering to trade more than 3% higher on the day. Crude prices have been slipping this week as the EU struggled to find agreement on a plan to phase out Russian oil imports and Chinese lockdowns weigh on demand.

It’s been a volatile 24 hours for natural gas prices after Ukraine’s network operator stopped accepting gas at Sokhranivka, one of two cross-border points handling Russian deliveries. The force majeure was called as a result of occupying forces disrupting the operation of the station. Ukraine has requested flows be rerouted through Sudzha but it’s unclear if that’s possible. Which means further potential disruption for Europe. It’s a good thing supply from elsewhere has been boosted and the bloc has enjoyed better weather.

Gold relief but the trend is against it

Gold prices are edging higher in the middle of the week, buoyed by a weaker dollar and lower yields. It’s not been a great period for the yellow metal which hasn’t seen the benefit of recent risk aversion as traders increasingly price in more aggressive action from central banks. It has found some support around USD 1,830 but for how long? Momentum is very much against it, although that has eased recently.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam