Oil falls on SPR, China fears
Crude prices are sliding on expectations the Biden administration will continue to tap strategic oil reserves and on fears China’s situation is much worse. The Biden administration has one mission right now and that is to ease the inflation pain the American consumer is feeling before the midterm elections. The price at the pump is an important weekly reminder for the consumer and energy traders should not be surprised if Biden continues to be aggressive in tapping the SPR.
China’s decision to delay the release of key economic readings could suggest the data is so ugly that they don’t want it released during the party’s congress. This round of data was going to reflect the last round of COVID lockdowns, which probably would dampen the government’s ambitious agenda for the next five years.
Crude prices are struggling here and that will continue if the mood on Wall Street sours.
It is going to take a lot to get investors interested in buying bullion. Gold prices continue to remain heavy despite a respite in the bond market selloff. Earnings season has driven some investors back into equities, which means demand for safe-havens was low. The current market environment is still bearish for gold as Wall Street becomes convinced that the Fed will need to continue rates into the spring.
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