Oil rallies on tight supplies
Oil prices are rallying as last week’s selloff was overdone given how the short-term crude demand outlook remains for the US and China. The oil market remains too tight over the short-term and rising expectations over tougher sanctions with Russian crude should keep demand especially strong here.
Energy traders saw oil prices slide almost 15% in just a week, despite a very tight market. The paid-for crude prices wasn’t justified and more of a reflection of the risk aversion mood that sank global equities.
WTI crude should easily be supported above the USD 100 level throughout the summer, which means any dips will be bought into.
Gold prices are anchored as investors await to see how aggressive central banks will be with their tightening cycles and if the bond market will sway them into larger-than-expected hikes. Gold is struggling today as Wall Street buys up beaten-down stocks and cryptos. Demand for safe-havens is not the vibe on Wall Street and that could have bullion remaining vulnerable here to the lower boundaries of its new USD 1800 to USD 1880 trading range.
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