Oil rebounds, gold stabilizes

Oil recovers ahead of OPEC+ meeting

Oil prices are heading higher once more on Wednesday as the prospect of a ceasefire being close quickly faded and the economic war between Russia and its “unfriendly” trading partners ramped up. The Kremlin’s decision to demand gas payments in roubles and threaten similar actions on other commodities that its trading partners rely upon risks stoking shortages and recessions.

There’s seemingly no end in sight for the increasingly tight oil market and should Russia expand its rouble demands beyond gas and the West tighten sanctions, prices could get much higher.

OPEC+ won’t provide any relief, even if it were capable of doing so. Its failure to hit the output targets its set itself is part of the problem. And those that could instead choose to stick by the alliance which claims to be apolitical while turning a blind eye to tight markets and high prices.

Gold steadies amid Russia doubts

Gold briefly dipped below USD 1,900 on Tuesday as risk appetite was boosted by supposed developments in Turkey but as that enthusiasm faded, so did the sell-off. It is now relatively flat on that day and back around USD 1,920 where it has hovered around for most of the session. We could continue to see risk dictate the moves in the yellow metal ahead of Friday’s jobs report, at which point the focus may temporarily shift back to inflation.

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Craig Erlam

Craig Erlam

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.
Craig Erlam