While Gold continues to be benefited by market volatility and a spike in risk aversion, it has also weighed on Oil prices. Bullion is still close to the $2,000 mark.
Although the Fed may have approved a 25-basis point increase, it only increased the fear that more aggressive rate increases will lead to the global economy falling into recession. Oil prices are struggling in this climate, especially as China’s recovery has remained subdued so far.
Oil prices Although the weekly gain was modest, it was capped by continued volatility in markets due to central banks’ ongoing rate hikes. Investors worry that officials will prioritise price stability over financial stability. They also fear that monetary conditions could tighten unreasonably, which would curtail world growth and cap demand. Bloomberg reported that money managers reduced net-long positions Brent and WTI in order to lower their net-long positions The wagers were increased against the benchmarks and cut longs. Total open interest for UKOIL It was the highest mark since February 20, 2022 ThursdayBloomberg reports that it is a record.
For now, Supply continues to outstrip the demand despite Russia’s output reduction, which has been extended to the end of June. Bloomberg reported that this reduction has not had an impact on global supplies.
