Oil slides after OPEC+ meeting
Crude prices tumbled after energy traders saw both the smallest increase in OPEC+ history and as gasoline demand plunged in the US. It looks like OPEC+ is resisting calls to boost output because the crude demand outlook continues to get slashed. The world is battling the ongoing global energy crisis and it won’t be getting any help from OPEC+.
The weekly EIA crude oil inventory was very bearish. A headline build of 4.46 million bpd and plunging gasoline demand sent oil prices sharply lower. The demand outlook might be much worse than everyone was thinking as US gasoline demand fell 7.1%, despite lower prices and this still being peak summer vacationing time.
The oil market will remain tight over the short-term and that means we should still have limited downside here. Crude prices should find strong support around the USD 90 level and eventually will rebound towards the USD 100 barrel level even as the global economic slowdown accelerates.
Gold
Gold prices are softening as risk appetite returns after strong US economic data and earnings. The primary driver for gold will be Wall Street’s assessment of how many more massive rate hikes that Fed has left until they enter a period of keeping policy steady. It looks like the chances of a 75 basis-point rate increase at the September FOMC meeting are very much on the table and that might keep the dollar supported, which should make it hard for gold to rally above the USD 1800 level for now.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Ed Moya
His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
Latest posts by Ed Moya (see all)
- Market Insights Podcast – Powell struggles to deliver a hawkish hold - 1 November 2023
- Fed React: USD/JPY softer after Fed fails to deliver hawkish hold - 1 November 2023
- EUR/USD: Dollar wavers on slower pace of Treasury Refunding Sales and mixed labor data - 1 November 2023