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Oil lower post OPEC+ and EIA report, gold rally stalls

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Oil slides after OPEC+ meeting

Crude prices tumbled after energy traders saw both the smallest increase in OPEC+ history and as gasoline demand plunged in the US. ​ It looks like OPEC+ is resisting calls to boost output because the crude demand outlook continues to get slashed. ​ The world is battling the ongoing global energy crisis and it won’t be getting any help from OPEC+. ​

The weekly EIA crude oil inventory was very bearish. ​ A headline build of 4.46 million bpd and plunging gasoline demand sent oil prices sharply lower. ​ The demand outlook might be much worse than everyone was thinking as US gasoline demand fell 7.1%, despite lower prices and this still being peak summer vacationing time. ​

The oil market will remain tight over the short-term and that means we should still have limited downside here. ​ Crude prices should find strong support around the USD 90 level and eventually will rebound towards the USD 100 barrel level even as the global economic slowdown accelerates.

Gold

Gold prices are softening as risk appetite returns after strong US economic data and earnings. ​ The primary driver for gold will be Wall Street’s assessment of how many more massive rate hikes that Fed has left until they enter a period of keeping policy steady. ​ It looks like the chances of a 75 basis-point rate increase at the September FOMC meeting are very much on the table and that might keep the dollar supported, which should make it hard for gold to rally above the USD 1800 level for now. ​

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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