Oil prices have steadied a little after rebounding strongly this past week. There are many forces dictating the price action in oil markets right now, with economic uncertainty right up there alongside a potentially unpredictable OPEC+. The stronger dollar is potentially another headwind, with the rally losing steam earlier this week as the greenback surged in the aftermath of the inflation release.
The inventory data on Wednesday didn’t cause much of a wobble despite surpassing forecasts with a 2.442 million barrel build against expectations of something far more modest. Of course, this was still much smaller than what the API number indicated a day earlier so perhaps that limited the surprise factor.
Has the damage been done?
Gold is still hurting after the inflation data on Tuesday. It was just starting to find its feet again ahead of the data and the report delivered a crushing blow. The yellow metal is off around four-tenths of one percent this morning and comfortably below $1,700. The key level though is $1,680 and a significant break of this could be painful, with it having been a floor over the last couple of years. We could then see some support around $1,660 but at that point, the damage will have been done.