- EIA Report showed Cushing stockpiles declined most since October 2021
- Fed rate cut bets for December 13th FOMC meeting rise to 24.0%
- Bitcoin bulls nervous a US ETF launch could trigger a similar Bitcoin futures collapse
Oil
Crude oil prices tentatively rose but gains were capped as Russian exports are expected to rise and as the EIA report posted disappointing demand figures. Oil was steadily rising over the past few weeks on expectations that Russia and the Saudis would keep this market tight. Russia’s refined cargoes are rising and appear to be heading towards a 3-month high. The Kremlin might not be motivated to live up to their export pledge, especially considering Russian military efforts are intensifying. The attacks on Ukraine’s Black Sea coast signals a significant escalation in the war, which might motivate the West to put more pressure on the main buyers of Russian oil.
The oil market might remain tight but the lack of Russian compliance with oil exports might mean Brent crude won’t be able to extend much higher from the low-$80s.
Gold
Gold’s rally is ready for a break as the dollar strengthens despite rising expectations for the Fed to deliver one last rate hike next week. The UK inflation report signaled disinflation is happening globally and that should provide some short-term dollar strength. Gold is going to struggle here if the dollar stages a minor comeback and if earnings season keeps the US stock market winning streak going. Gold is trying to form its pre-FOMC decision trading range and that might end up being $1970 and $2000.
Bitcoin
Bitcoin continues to waver around the $30,000 level as traders await any Bitcoin ETF updates. Some attention is shifting towards Democratic Presidential Candidate Robert F. Kennedy Jr. He has suggested that he could support backing the dollar with a little bit of Bitcoin.
He said, “My plan would be to start very, very small, perhaps 1% of issued T-bills would be backed by hard currency, by gold, silver platinum or bitcoin…. Backing dollars and U.S. debt obligations with hard assets could help restore strength back to the dollar, rein in inflation and usher in a new era of American financial stability, peace and prosperity”
Kennedy’s stance on crypto does not seem like it will be adopted by most presidential candidates, but it does open the debate going forward. Every commitment by any key official is a positive step for further crypto adoption.