WTI crude hits USD70
Oil prices are climbing higher for a second straight session on Wednesday, boosted by signs of strong demand in the West, while concerns of Iranian oil re-entering the market eased.
An improving demand outlook is lifting oil prices, with crude passing the key USD70 level for the first time since 2018. The successful vaccine rollout in the West, combined with optimism surrounding a strong summer driving season in Europe and the US, is fuelling demand expectations.
Adding to the upbeat mood, in a bullish move, the EIA upwardly revised US fuel consumption forecasts to 1.49 million barrels per day, up from 1.39 million.
The positive signs for the oil market keep lining up. API inventory data also showed that crude stockpiles declined last week in line with forecasts. EIA inventory data will be eyed today.
Providing yet more support to the price of oil, US Secretary of State Antony Blinken soothed concerns of Iranian oil flooding back into the market. He said that even if the Iran nuclear deal were revived, hundreds of US sanctions would remain.
The ducks have lined up nicely for the oil market right now. With no OPEC meeting due until early July, oil could well target USD72.00 in the coming weeks.
Gold trades in familiar range
The precious metal slipped lower on Tuesday as the stronger greenback overshadowed weaker treasury yields. Investors reassessed the prospects of a move by the Fed amid disappointing NFP data and rising prices. Today, gold is trading in a tight range around the familiar USD1890 level as investors digest mixed Chinese inflation data and a quiet US dollar.
Looking ahead, with a light US economic calendar, the US dollar and yields are likely to remain the biggest driver of the precious metal ahead of tomorrow’s US inflation report.
