Oil prices are edged higher on Thursday, continuing to recover from the lows earlier this week when Brent briefly breached $100 again. Ultimately, we’re continuing to see consolidation in crude markets, with the range tightening and potentially setting us up for a volatile breakout in the coming weeks.
The same factors remain at play here and could be the catalyst for an eventual breakout, be it further Chinese lockdowns, slow output growth from OPEC+, new supply disruptions, larger reserve releases etc. Or, of course, an escalation in tensions between Russia and the West, leading to an immediate embargo. The Kremlin has taken us down that path in the natural gas space, imposing ruble demands on buyers that have led to Poland and Bulgaria being cut off. The stand-off could spill over into oil markets.
Gold steadies after recent dive
The slump in gold appears to have slowed after the yellow metal hit a low around $1,870. The strength of the dollar over the last week has been a real drag on gold which has seen a dramatic change in fortune since rallying close to $2,000 earlier this month. With the dollar continuing to see such strong support in these turbulent times, the yellow metal may remain under some pressure. The break of the mid to late March support isn’t ideal and the next big support falls around $1,850.