Oil stabilises as OPEC expresses concerns
Oil prices are a little flat after spiking higher on Wednesday in response to apparent storm damage on the Caspian Pipeline Consortium (CPC) that will affect around a million barrels per day from Kazakhstan for up to a couple of months. Coming at a time when the market is already extremely tight, it could ensure prices remain higher and vulnerable to further increases.
OPEC has reportedly expressed its unease to the EU regarding a proposed ban on Russian oil. In much the same way that Western leaders have had their requests for additional oil production overlooked in recent months as prices have surged, I can’t help but think OPEC’s concerns will fall on deaf ears. I guess we’ll soon see just how strong the OPEC+ alliance is.
Gold higher amid commodity surge
Gold is creeping higher again, adding to yesterday’s gains which came in risk-averse trade. The yellow metal remains well supported against the backdrop of high inflation and commodity price surges, not to mention waves of risk-aversion in these highly uncertain times.
It ran into some resistance around USD 1,960 earlier in the session before pulling back to trade around USD 1,950. It’s given back a lot of the gains secured earlier this month as traders sought the shelter of a reliable safe haven and inflation hedge amid the Ukraine invasion and sky-rocketing commodity prices. But it’s seen firm support around USD 1,900 even as risk appetite has improved. Upside may be slow as a result of this but equally, I expect this support to remain firm in the absence of significant progress in ceasefire talks.
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