Home/Central banks/Commodities/COVID-19/Metals/Newsfeed/Oil

Oil surges after modest OPEC+ boost and bullish EIA report, gold surges

Share Print 0
Oil
The Saudis pulled it off again.  They managed to keep both the Russians and Americans somewhat happy, while boosting production targets without triggering a collapse in oil prices.  The oil market will still remain tight given the production boost is modest at best. Hikes for both July and August will be 50% higher at 648,000 bpd. The original plan of 430,000 bpd of output was not getting the job done and with China’s COVID situation and easing of lockdowns, it was easy to justify an increase at this meeting.
Crude prices rallied as the OPEC+ decision does little to change how tight this oil market remains. Also providing support for crude was a bullish EIA crude oil inventory report.  The headline draw of 5.1 million bpd was larger-than-expected while demand for gasoline and distillates surged. ​ ​
With hurricane season now here, it is hard to imagine anyone becoming overly aggressive with a call for a major pullback with oil prices. WTI crude seems like it will continue to head higher as inventories will remain low, US production remains stuck at 11.9 million bpd, and after the US extended its streak of exports to a 12th straight week.
Gold
Gold is close to breaking out here as investors scramble for safe-havens as relentless inflation fears drive economic growth slowdown calls.  A tremendous amount of uncertainty remains with how surging energy costs will drive the inflation theme and whether that will force the Fed to continue hiking rates by half-point in September.
Also providing a boost for bullion was Microsoft’s outlook warning, which shows even the mega-cap stocks still have a rough road ahead.  If gold can close above USD 1880, that might trigger a wave of technical buying that sends prices towards the USD 1930 area.

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

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

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.
, , , , , ,
Back to Top