Crude prices surged after Russian oil supplies were halted to Eastern Europe. A simple disruption that stemmed from Western sanctions that do not allow accepting transit fees from Moscow reminded us of how quick the oil market can tighten. Whatever crude demand destruction that occurs from a weakening global economy, won’t be able to drag down oil prices much lower given how low the supply outlook remains.
Much attention is falling on Iran nuclear deal talks and that could be a wildcard in providing much-needed supplies. Iran is also looking at the US political situation and might not be confident that even if a deal is revived that it will hold up if a Republican wins the 2024 presidential election, especially if it is former President Trump.
Crude prices should eventually find a home above the $100 level, especially in the winter when the SPR release stops and if China demand roars back.
Gold prices rise ahead of inflation report
Gold prices are firming up ahead of a pivotal inflation report that could tilt the Fed rate hike expectations scales. Gold is getting a boost today from both safe-haven flows as stocks weaken and as the dollar softens. If inflation eases a little more than expected, gold could make a run towards the $1850 region. Geopolitical risks remain elevated and that could keep gold supported above $1800 going into year-end.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at email@example.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.