Gold 1786,925
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EURUSD 1,1764
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DJIA 35335,50
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OIL.WTI 67,835
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DAX 15837
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Interesting developments are taking place in the oil market. A month and a half ago, black gold hit a year high of $76.5 a barrel. Then they started to fall rapidly. It was based on profit taking and increased risks to the world economy due to the rapid spread of the delta strain of the coronavirus.
OIL.WTI
This week, however, the situation has changed dramatically. On Monday and Tuesday we saw 2 long green candles. They allowed oil to bounce back from the lows shown immediately by 9%. On Wednesday the bulls took a pause. And the bears breathed a sigh of relief. Everyone is trying to figure out what exactly is going on? Is this another profit taking or a continuation of the rising trend?
Yes, on the one hand there is a specific reason for this rally. The price of black gold rose strongly after the news from Mexico. A fire at an oil platform led to a fall in production of more than 400.000 barrels per day. However, Mexico’s state-owned oil company is calling for the situation not to be exacerbated. According to its estimates, production will recover by the end of the month.
It seems to us that the main driver for this growth lies elsewhere. There is the start of the bankers’ symposium in Jackson Hole. And everyone is expecting the Fed Chairman’s speech as well. Many believe that Jerome Powell will announce a reduction in bond purchases of USD 120 billion every month at this event. Or generally about a complete scrapping of this programme in the 1st quarter of 2022.
But the rally in commodities on Monday and Tuesday (we are not just talking about the oil rally), suggests otherwise. Either rumours have leaked into the market. Or the “smart money” already knows for sure that no monetary policy tightening is planned. Which means they are ahead of the curve.
If this is indeed the case, we could see new highs for oil as early as Q4 this year.
14.30 US annual Q2 GDP data
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