Oil cools further amid some supply hope
Oil prices are marginally lower at the start of the week after enjoying a bit of a rebound on Friday. We appear to be seeing an interesting moment in oil where a tight market is being priced against a likely economic decline, even a recession, which could help to rebalance it.
And there may be other factors contributing in some way to the cooling-off, with Nigeria indicating that it will be able to hit its production quota by August having fallen well short until now. At nearly half a million barrels, that would be a significant uplift over the next couple of months.
US output is also gradually rising, with shale producers making the most of high prices by re-fracking existing wells, while the number of rigs also continues to edge higher. US output is now a little over a million barrels per day below the pre-pandemic peak.
Gold consolidates further
Gold prices are pretty much flat at the start of the week as it continues to tread water around USD 1,830. Rather than a breakout in recent weeks following all of the central bank activity, the yellow metal appears to have consolidated further. Reports of an impending G7 ban on Russian gold imports appeared to have given it a minor lift earlier but given the decision simply formalises a practice that was largely already in place, I don’t think we can read anything into the move.
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