Crude prices pared losses after energy traders were reminded that while the market might flip to a surplus next quarter, OPEC will keep prices supported. The release of the OPEC 2022 world oil outlook still supports both medium and long-term cases for higher prices. OPEC Secretary General Al Ghais noted that the surplus was the main reason for the cut in OPEC production. OPEC still runs the show that is the oil market and it will take necessary action to keep oil prices supported.
Gold
Gold was unable to snap a losing streak that will now reach seven months. Gold has been picked on ever since the war in Ukraine started and inflation ran wild. Gold is starting to show some signs of life, but it will be hard for it to gain momentum until inflation is declining. Eurozone inflation hitting a record high is troubling news for the euro, but eventually, a recession will force prices to go down.
Gold’s make-or-break moment will be this week’s Fed decision that should show policymakers are getting close to pausing their tightening cycle. The US economy is slowing down and if we start to see signs that the labor market is cooling, that could be the trigger to get the gold bugs going. The Fed will likely lean on their data dependency and that might make this NFP Friday extra special.