Oil slips amid positive nuclear talks and a surprise inventory build
Oil prices are slipping again on Wednesday with WTI dropping back below $90 a barrel amid positive noises coming from the Iran nuclear talks. I don’t think we’re at the optimistic stage yet as we’ve seen talks break down before when a deal appears close but it’s looking more promising than it has for many months. And those involved have an extra incentive to get a deal over the line.
The inventory data may have given crude another nudge lower, with API reporting a surprise increase of 2.156 million barrels last week. Data from EIA today was expected to show a 100,000 barrel increase so we could be in for another upside surprise which could further weigh on the price. A higher inflation reading could be another downside risk as traders price in further tightening and increased recession risk.
Gold driving higher ahead of inflation data
Gold has been well supported going into the inflation data this week. The prospect of a nasty surprise that has driven caution elsewhere doesn’t appear to be holding gold back, with the yellow metal testing $1,800 yesterday and taking another run in that direction today.
A softer inflation reading could be just what it needs to break through the resistance barrier and establish itself above $1,800 once more, something it hasn’t managed to do since earlier in the summer. A stronger figure on the other hand could strengthen the resistance and trigger profit-taking after a decent run over the last few weeks.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
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