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The SC crude oil futures contract fell 4.00% intraday, currently trading at 490.00 yuan per barrel.On June 23, Deutsche Bank lowered its gold price forecast by up to 22% as investors grew increasingly cautious about the outlook for Federal Reserve monetary policy and investment demand for the precious metal dried up. Michael Hsueh, a research analyst at Deutsche Bank, wrote in a report that he now expects gold to reach $4,300 per ounce in the third quarter, a reduction of more than one-fifth from his previous forecast; and $4,800 in the fourth quarter, a reduction of 17%. This still implies that gold prices will continue to rise from the current level of around $4,110 per ounce, but the bullish sentiment is significantly weaker than before. Deutsche Bank shifted to a more cautious outlook, following Goldman Sachs move last week, which lowered its year-end gold price target by $500 to $4,900 per ounce. Hsueh stated that the Feds repricing, coupled with resilient US macroeconomic data, were the main factors driving gold prices lower. The banks fourth-quarter target is based on the assessment that the Fed will continue to maintain unchanged interest rates, but if there are three to four rate hikes, gold prices could fall to around $3,800. Continued outflows from gold ETFs indicate that this traditionally supportive factor for gold prices is "significantly absent." On the positive side, the only remaining strong pillar is central bank demand, and we expect this trend to continue for some time.Nasdaq 100 futures fell more than 2%, S&P 500 futures fell 1.08%, and Dow Jones futures fell 0.36%.Sources indicate that Nissan halted development of its electric Qashqai SUV early last year. Even if the project is restarted, the model is not expected to launch until the next decade.Japanese chip stocks continued their decline, with Kioxia shares falling 14% and SoftBank Group shares dropping nearly 10%.

Oil costs increase as supply restrictions trump economic worries

Charlie Brooks

Jul 05, 2022 11:12


Oil prices climbed on Monday as supply worries spurred by a decrease in OPEC production, unrest in Libya, and sanctions against Russia trumped fears of a worldwide recession that would diminish demand.


In June, Euro zone inflation hit an all-time high, boosting the case for rapid rate rises by the European Central Bank, while consumer sentiment in the United States reached an all-time low.


Brent oil rose $2.26, or 2%, to $113.89 a barrel as of 12:47 p.m. ET (1648 GMT), after shedding more than $1 in early trading. The price of U.S. West Texas Intermediate (WTI) crude rose $2.20, or 2%, to $110.63 despite the lack of trading activity over the Fourth of July holiday.


According to a Reuters survey, the Organization of the Petroleum Exporting Countries (OPEC) failed to meet its June goal of increasing production.


Thursday, authorities in OPEC member Libya declared force majeure at the Es Sidr and Ras Lanuf ports and the El Feel oilfield, claiming a reduction of 865,000 barrels per day in oil output (bpd).


Meanwhile, more than two weeks of unrest have caused Ecuador to lose almost 2 million barrels of production, according to Petroecuador, the country's state-owned oil company.


This week, a strike in Norway may restrict supply from the biggest oil producer in Western Europe and reduce overall petroleum production by 8 percent.


"This background of rising supply interruptions clashes with a probable shortage of spare production capacity among Middle Eastern oil producers," said Stephen Brennock of oil trader PVM, referring to the producers' limited ability to pump more oil.


And prices will climb if new oil production does not reach the market shortly.


On Monday, British Prime Minister Boris Johnson asked OPEC+ to raise oil output to tackle the growing cost of living.


As a consequence of Russia's invasion of Ukraine, supply concerns have sent Brent oil prices close to 2008's record high of $147 a barrel.


As a consequence of restrictions on Russian oil and limited gas supplies, surging energy prices have driven inflation in certain countries to multi-decade highs and stoked fears of a recession.


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