WTI crude oil struggles below USD60
Oil prices are mildly lower on the day but are set for over 3% losses across the week. Investors continue to weigh up the prospect of increased supply from the OPEC+ group over the coming months against demand concerns as the pandemic tightens its grip in some regions. Europe’s almost indefinite lockdown combined with record Covid numbers in India and Brazil suggest that fuel-demand recovery still has a long way to go.
While data this week has shown that crude stockpiles are on the decline, it’s also shown that gasoline inventories are not. The rebalancing process within the oil market is in progress. However, with the demand outlook recovery expected to be uneven, this is expected to be a long process. For now, crude oil is likely to hover around the USD60 dollar level until we start to see more encouraging Covid developments.
Gold looks vulnerable after weekly rise
With the US dollar and US treasury yields on the rise, gold is once again out of favour today, although it is still on track for a rare weekly gain. Weaker-than-expected jobless claims and confirmation that the Fed won’t be tightening monetary policy any time soon have seen gold bugs reappear.
There is no major market-moving data due to be released in the US session, meaning gold will trade at the mercy of the US dollar and market sentiment. With expectations of a strong US economic recovery, there’s a good chance that the move higher in gold will be short-lived.
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