Oil slides as OPEC forecast another tight year
Oil is falling quite heavily today, off more than 4% and pushing WTI back below USD 100 a barrel. Recession fears are strengthing the bearish case for crude and we’re seeing those materialise after previously reaching very high levels.
That said, the market remains extremely tight and the OPEC report today highlighted that fact, with demand next year seen exceeding supply by a million barrels per day. That should limit the downside we see as a worsening growth outlook is priced in. Of course, President Biden will be hoping to change that dynamic during his visit to Saudi Arabia this weekend.
Gold enjoying a mild reprieve
Even gold is feeling some love today, squeezing out small gains at one stage after being driven lower once more earlier in the session. Intensifying economic fears are contributing to slightly lower interest rate expectations and in turn, lower yields. That may be offering some support to the yellow metal but not enough. The old adage of up the stairs and down the elevator in stock markets is very much looking the case for gold right now. With that, I’m struggling to get too excited by rallies and instead the focus may be on the USD 1,680-1,720 region.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
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