Crude Oil Prices Explode Higher - Are Gains Sustainable? Advertisement
Crude Oil Outlook:
In energy markets, prices are reflecting a battle of the fundamentals: short-term (cold spell in US) versus long-term (significant supply on sidelines).
Crude oil prices are nearing the January 2020 high, and in doing so, are readying a test of the descending trendline from the July 2008 (all-time high) and June 2014 highs. A significant bottom may be in place soon.
Recent changes in retail trader positioning gives us a bullish bias towards crude oil prices.
Crude Oil Prices Near 2020 High
In energy markets, prices are reflecting a battle of the fundamentals: short-term versus long-term. In the short-term, a cold spell that has swept across the midwestern US has buffeted energy markets to their highest levels since January 2020. A crippled US energy supply has help bolster the supply-demand imbalance that’s been the driving force in markets for the past several month
Analysts Project $100 Supercycle for Oil Post-pandemic
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Oil will return to a starring role in India. The car-centric society is set to see oil demand bounce back strongly in 2021 helped by fiscal stimulus as it leaves Covid-19 in its rear-view mirror. Any shift away from the fossil fuel towards cleaner energy will be slow going. Oil’s importance to India’s needs is not necessarily a risk since energy security goes both ways. India is unabashedly reliant on oil and is a key buyer of crude from big suppliers like Saudi Arabia and Iraq, while the OPEC producers equally depend on India’s appetite for Middle East grades. The relationship is mutually beneficial and the ties between India and top producers are only getting closer.
Gold, Crude Oil Outlook: Will FOMC Meeting Catalyze Price Volatility?
GOLD PRICE OUTLOOK:
Gold prices extended lower despite a weakening US Dollar, reflecting weak investor appetite
The FOMC meeting will be eyed by traders for clues about a possible twist in monetary policy
WTI prices are underpinned by a larger-than-expected draw in crude inventory, weaker US Dollar
Today’s FOMC meeting is probably the most important macro event for traders around the world. Market participants are eyeing an update from Jerome Powell about the central bank’s view of the economic outlook, fiscal stimulus as well as clues about future tapering. In view of deteriorating labor market conditions and viral waves in winter, the Fed’s monetary policy is likely to remain accommodative, which could help to cushion the downside for gold prices.
Gold, Crude Oil Outlook: Weaker Dollar and Reflation Hopes Underpin Prices
GOLD, CRUDE OIL PRICE OUTLOOK:
Gold prices are working on a three-day rally to US$ 1,850, up nearly 2.5% from Monday’s lows
WTI crude oil prices jumped 2% on Yellen’s push for fiscal stimulus, which raises reflation hopes
A weakening US Dollar and stimulus hopes may continue to support commodity prices
Gold prices climbed for a third day as the US Dollar fell alongside Treasury yields, alleviating pressure on precious metal prices. Last night, US Treasury Secretary nominee Janet Yellen boosted market confidence by showing her support for Biden’s US$ 1.9 trillion stimulus package in the Senate confirmation hearing. Yellen’s comments revitalized hopes for reflation and brightened the prospects for economic recovery, sending risk assets broadly higher alongside gold and crude oil prices.
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