Crude prices are rallying after stockpiles declined more than expected and as OPEC+ remains committed to keeping supplies tight. The EIA report showed that crude, gasoline, and distillate demand improved from the prior week. Gasoline inventories rose but that was somewhat to be expected as peak driving season is well behind us. Production remained steady while imports tumbled. As we approach the peak holiday season, jet fuel demand has clearly returned, approaching the highest seasonal levels seen since 2017.
The path of least resistance is clearly higher for oil prices and it should continue if China’s reopening doesn’t have major obstacles.
Gold prices are ready to enter holiday mode as the bond market selloff has run out of steam. Gold got a modest boost after falling inflation bolstered consumer confidence and pushed risky assets higher. It looks like gold might struggle to get anywhere close to the $1850 level unless we see a fresh major catalyst.
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