Oil falls on SPR, gold dips after NFP

Oil falls below USD 100 on SPR release

Oil prices are continuing to fall today, as we await an announcement from IEA regarding the coordinated SPR release following President Biden’s decision this week. Unlike on the previous two occasions, markets have responded favourably to the latest release, which is by far the largest ever from US reserves. The timing nicely coincides with the run-up to the midterms as well which I’m sure is merely a coincidence. Whether it has a significant impact in that time though will ultimately depend on the situation in Ukraine.

One thing it will do is increase OPEC+ resistance to boosting output, not that it has shown any ability to even deliver 400,000 barrels per day increases in recent months. Compliance increased to 151% in March, from 136% in February, meaning its new slightly higher targets will simply increase the amount in which it will likely fall short in May. At least the group isn’t being political in its decision making…

Gold eases lower after strong jobs data

Gold is a little lower at the end of the week, with the jobs report weighing a little as the dollar strengthened. It doesn’t really change much as far as the yellow metal is concerned as it remains range-bound, comfortably above USD 1,900 and seemingly going nowhere fast. Traders are happy to hold on but in no rush to buy, it seems.

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.