Crude prices are slightly higher after a brutal week saw COVID-19 concerns across Asia and Europe dampen the short-term crude demand outlook, while OPEC+ seems poised to deliver more output. A big driver for oil prices will be Iranian output and that question won’t get answered until well after Iranian hardliner Ebrahim Raisi will be inaugurated president in early August.
Last month, everything on the supply and demand side was bullish for crude prices. This month, reopening momentum all around the world took a major step backwards. What is most concerning to the outlook is that even highly vaccinated countries are struggling with the Delta variant. The UK is going ahead with Freedom Day despite a rise in cases, while the U.S. has seen a doubling of cases in the last two weeks. While the U.S. and U.K. won’t have major reversals with the easing of curbs, it shows how much harder the fight will be for the rest of the world. Singapore is imposing more curbs and Thailand posted a record number of cases. Africa suffered its worst pandemic week ever as it struggles to get its hands on vaccines.
has tentatively found support around the $72 level but that might not last given how high oil prices have run since the end of March. WTI crude could see an early test of the $70 level next week if the energy market does not see any major shifts with the demand outlook and as long as OPEC+ ratifies the agreement made between Saudi Arabia and the UAE.
Gold prices are giving back some of this week’s gains as rise following a robust retail sales report. ’s rally fizzled after testing critical resistance levels around the $1,835 area. Fed Chair Jerome Powell’s testimony to Congress was not enough of a reason for gold to break higher despite his dovish assurances.
With the Fed’s blackout period starting tomorrow, gold is likely to remain in choppy trade until we get beyond the July 28 FOMC decision.
pared earlier losses after reports that Bank of America (NYSE:) approved trading of Bitcoin futures for some clients. This is a big commitment for America’s second-largest bank and signals that interest in trading cryptocurrencies is here to stay. On Wall Street, if one bank sees opportunity in doing something risky, the rest will easily justify following suit.
Bitcoin is still stuck near the lower boundaries of its tight trading range, but this is still positively viewed as a healthy consolidation.
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