Tight oil markets drive up crude oil prices
Crude oil prices are rising as traders continue to believe that the short-term concern of the delta variant will not change this market away from a deficit soon. While German Chancellor Merkel expresses concerns about the European-extended Delta variant, improving vaccination rates means hospitalization rates do not threaten her healthcare system. The oil market will remain tight and prices will accelerate once the new trend or restrictions in Southeast Asia, Australia and Europe begin to loosen.
According to Baker Hughes, American shale drilling appears to be on the verge of declining for the rest of the year and this should maintain OPEC + content as production gradually increases.
WTI crude appears to be consolidating between the $ 70 and $ 75 level in the short term.
Gold prices are slightly higher as Treasury yields fall after a reading of higher-than-expected unemployment claims. The weak launch did not discourage investors, as seasonal adjustment factors may have played into the big failure. Many attribute the soft reading to the adjustments of the auto industry and, as some states have again restricted COVID restrictions.
Gold continues to stagnate at around US $ 1,800 and is likely to remain so until after next week’s FOMC meeting. The debate over intensity reduction will intensify and enough clues will be given to let this market know if the Jackson Hole Symposium is at stake in August. Economists ’expectations are everywhere when the Fed will make the announcement slower and what the pace will be.
The recent softness in some of the labor market readings and mixed signals about price pressures could help the Fed err on the side of prudence and point to this meeting. Any Fed ingenuity will be the fuel that will help raise gold and potentially surpass the $ 1,850 level.
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