Oil slides as US and Iran near nuclear deal
There’s no shortage of volatility in the oil market at the moment, with multiple forces combining to create very lively conditions. The market is obviously extremely tight which is why we’re seeing some large moves on a daily basis and the price could already be in triple-figure territory if not for the nuclear talks between the US and Iran.
And it’s this that’s driving the declines today, with reports suggesting an agreement is days away. That would be huge as it could mean around 1.3 million barrels per day of crude quickly re-entering the market and easing some of those supply-side pressures. You can imagine the US has been very motivated to get this deal over the line ahead of the midterms later this year, given how ineffective its last efforts were to bring prices down.
Gold still has plenty of appeal
Gold is continuing to rally amid all the geopolitical uncertainty. Not only do the events on the Ukrainian border have investors seeking out safe-havens, but it also offers inflation protection at a time of surging prices and the prospect of higher oil and gas prices, if Russia does invade.
The latest move has seen gold hit its highest level since mid-June and there still appears to be momentum in the move so we could see USD 1,900 tested. That’s the next big test for the yellow metal and a big escalation in Ukraine could be the catalyst for such a move.
