OPEC+ displays little appetite for lower prices
Oil prices were surging once again Wednesday and topped USD 110 as reports of disruptions to Russian exports as a result of the sanctions emerge. This was something that was already being priced into the markets prior to and after the invasion and the severity of the sanctions have justified those moves.
As the details of the sanctions become clear, some of those issues may be resolved considering they have been designed to disrupt flows as little as possible, but they will continue to be impacted.
And at a time when the market was already extremely tight, something OPEC+ still seemed unwilling to acknowledge after leaving planned increases unchanged again in April. Not that this matters enormously as they have been missing those targets by an increased margin each month so what reason was there to believe that increasing it would dramatically impact that? Unless certain members utilized some of that spare capacity.
Gold pares gains but has USD 2,000 in its sights
Gold was pulling back again on Wednesday after peaking at around USD 1,950 on Tuesday in risk-averse trade. It was off less than 1% so far today but the trend remained very much in place. Inflation and risk-aversion were the perfect environments for the yellow metal and we were seeing plenty of both at the moment, which was unlikely to change.
The question was how far it can go. Ultimately, that will depend on how long the invasion of Ukraine lasts and how severe the sanctions against Russia become. At the moment, it was looking like a case of when it will hit USD 2,000 rather than if, but a sudden and unexpected ceasefire would surely change that. One could only hope.