Oil higher as OPEC+ falls further short of targets
In a further sign that calls for OPEC+ to raise output further are a wasted effort, IEA reported that compliance with pandemic-agreed cuts rose to 136% last month, up from 129% in January. In other words, the group is not only failing to hit its quotas, it’s missing them by an estimated more than one million barrels per day. And that’s before sanctions were imposed on Russia which have disrupted its exports.
It’s starting to get a little desperate now and the situation is only going to get worse as Russia contends with Western sanctions. The IEA has provided a list of ways to reduce demand as oil looks set to settle at more than USD 100 a barrel for a sustained period of time. It’s easy to call on OPEC+ to do more but there’s only a small number of countries with ample spare capacity and one of those has started making noises recently around supporting increasing output. I guess we’ll see how loud their voice is and how influential Russia ultimately proves to be.
Gold eases as dollar rallies
Gold is edging lower again on Friday in risk-averse trade. The yellow metal has been well favoured recently in these conditions but we’re only seeing mild risk-aversion today and not on the back of any specific developments.
It comes in a week when the Fed has turned notably more hawkish so we may be seeing it lose a little hedge appeal on the expectations of aggressive tightening. The dollar is getting plenty of support today which will also be pressuring gold as we head into the close.
