“Oil prices would probably only be driven up further if OPEC+ were to stick to its production cuts agreement, i.e.
This comes as the Biden administration puts pressure on Saudi Arabia and UAE to reach a deal amid rising gasoline prices in the U.S.
Precious metals have benefited from the risk-off tone in the marketplace, with gold rising back up above the $1,800 an ounce level this week.
“Concerns surrounding deteriorating mobility due to a spreading Delta variant have been more than offset by an overly cautious policy from OPEC+, which has overwhelmingly driven the breakout higher in crude oil prices.
At some point in 2021, as we realize how constraint non-OPEC oil is, prices could even go back to over $100,” Goehring said.
“Global demand and year-end seasonality could see total global oil demand exceeding total oil pumping capability in Q4 2022.
“Energy trends have important gauge,” Shiels said on Wednesday.
“There are ten historical instances since 2001 when oil has ripped higher by more than 50% in 6 months; all metals often follow the large rally in oil with average 6mo increases ranging from +7% ,” she added.
“Uncertainty around oil could have big implications for inflation, and that is still one of the main drivers for gold,” he said.
Gold has firm underpinnings from its limited supply and store-of-value, diversifier status in the race to debase among fiat currencies from countries with rising debt-to-GDP and quantitative-easing levels,” McGlone wrote on Wednesday.
It is a ratio that we have followed closely over the last 25 years and, although many investors may disagree with us, we believe this indicator has significant investment implications,” said Goehring.