Oil shrugs off massive build, gold awaits CPI data

Oil

Energy traders should get used to seeing oil prices head higher. ​ Oil demand is coming back and expectations are high that China’s demand is about to skyrocket. WTI crude shrugged off an EIA crude oil report that contained a shockingly massive build. ​ Refinery shutdowns were widely known but the 18.96 million build was much larger than all expectations. Troubling weather on the West Coast has hampered some gasoline demand last week, while distillate demand improved. ​ ​ ​ ​

Crude exports are slumping, posting the largest decline since May 2021, ​ but some of that could be attributed to year-end buying. Production edged higher, but expectations remain that US output will remain around these levels

A two-hour grounding will deliver a little hit for jet fuel demand, but expectations are high for travel trends to continue to improve. ​ Oil is heading higher and it might not take much to propel WTI back above the $80 a barrel level.

Gold

Gold prices are doing much of anything ahead of the December inflation report. ​ Fed rate hike expectations are leaning towards a 25bp rate increase at the February 1st FOMC meeting and the March 22nd gathering appears to be a tossup between another small hike or a hold. ​ Gold’s recent rally has made an eight-month high and it could extend further if disinflation trends remain firmly in place.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. 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. Most recently 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 and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya