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January 16, gold futures rose on safe-haven demand ahead of Trumps inauguration. MUFG analysts said that golds strong start to the year will climb further in the short term given that US President-elect Trump is about to take office. Analysts said in a report that the Trump administration will push up safe-haven demand and is associated with the fear factor in MUFGs bullish expectations for gold in 2025. Commodities are important inflation hedges, and MUFG expects Trumps policies to trigger a series of inflation shocks. The agency added that in addition to gold as a preferred means of hedging against geopolitical instability, emerging market central banks are continuing to buy gold.Premiums for Middle Eastern oil benchmarks Oman and Dubai crude have reached their highest levels since November 2022.Bank of England survey: British lenders expect mortgage demand to fall in the next three months.Bank of England survey: UK lenders expect the availability of mortgages to rise in the next three months.On January 16, Sandra Horsfield, an economist at Investec, wrote in a report to clients that the faltering British economy may lead the Bank of England to cut interest rates further. Data released on Thursday showed that the British economy resumed growth in November, but the growth rate was lower than expected. Horsfield said this means that policymakers at the Bank of England need to take the prospect of disappointing economic activity this year more seriously. According to Investecs forecast, the Bank of England looks set to cut interest rates by 25 basis points at its meeting in early February, followed by three more cuts before the end of the year. Horsfield said: "Growth below potential has increased spare capacity and should put pressure on inflation in the medium term. The tightening of financial conditions caused by rising bond yields has also played a similar role."

WTI: A sluggish U.S. dollar and a declining inventory of crude oil weigh on purchasers above $69.00

Alina Haynes

Mar 22, 2023 14:36

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WTI crude oil gains offers to reduce intraday losses, the first in three sessions, during Wednesday's sluggish early trading. However, the price of black gold fell during the initial hours following the release of negative inventory data, the US Dollar's corrective rebound, and price-negative industry news. However, the dollar's inability to hold its ground and cautious optimism in the market appear to aid the energy benchmark as it posts modest losses near $69.30 at the latest.

 

Tuesday, the private Oil inventory data provider American Petroleum Institute (API) reported that the Weekly Oil Stock increased by 3,262 million barrels for the week ending March 17, compared to the previous week's increase of 1,155 million barrels.

 

In addition to the higher inventory levels, the US Dollar's corrective recovery, supported by an initial revival in US Treasury bond yields, favored WTI crude oil sellers following a two-day uptrend.

 

In addition, a lack of encouraging news from China President Xi Jinping's meeting with his Russian counterpart Vladimir Putin, despite their criticism of Western assistance to Ukraine, appears to exert downward pressure on the Oil price.

 

In addition, optimistic news from Reuters regarding the US oil refining industry encourages WTI bears. "The US oil refining industry expects to maintain a competitive advantage in exporting fuel to Latin America, despite Brazil's increased imports of Russian diesel," reported Reuters, citing an official from a leading US refining lobby.

 

WTI traders are primarily challenged by the market's indecision preceding the Federal Open Market Committee (FOMC) monetary policy meeting. Wednesday will see the release of weekly Crude Oil inventory data from the US Energy Information Administration (EIA), which is anticipated to be -1.448M compared to the prior week's 1.55M.


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