Another volatile session for oil
It’s been another incredibly volatile day in the oil market, with Brent crude at one point rising a few percent before reversing course to trade down more than 5% on the day. This comes as it continued to see resistance around USD 130 following the US and UK decisions to ban and phase out Russian oil imports.
With the EU not joining them, due to their far heavier reliance on Russian oil, and instead looking to do so over a much longer period, the price never rallied further. But with more sanctions to come and pressure increasing on Germany to intensify the pressure on Russia’s economy, we could see prices rising again before too long, in the absence of a ceasefire.
Brent has slipped back towards USD 120 where it is now finding some support but these markets remain extremely volatile. Further selling could quickly attract interest given the recent moves we’ve seen and further escalation, or even Russia pouring cold water on the idea of a deal, could see it rally strongly once more.
Gold slides back below USD 2,000
We’re seeing a big pullback in precious metals in the middle of the week, in line with the broader rebound we’re seeing in the markets. Gold has slipped back below USD 2,000, silver is paring gains and platinum and palladium are down more than 6%. It’s clear that hopes of negotiations moving forward are behind the moves, given how much they’ve rallied in recent weeks.
I just wonder whether it’s all a bit premature. It’s obviously an important first step and could be the kind of concession that gets the ball rolling but that may count for nothing if Russia isn’t in the mood to compromise. We could see these moves quickly reverse at the hint of talks not moving forward.
