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On June 22nd, Morgan Stanley stated that without a significant rebound in ETF inflows, its bullish target of $5,200 for gold in the second half of the year will become more difficult to achieve. Morgan Stanley analysts stated, "While central bank gold purchases may continue, ETF flows are more sensitive to changes in interest rate expectations. The missing link is ETF demand, which will likely remain sensitive to the Feds policy path, real yields, and the dollar." Morgan Stanley remains bullish on golds long-term prospects, as easing tensions in the Middle East and lower oil prices help alleviate inflation concerns. However, the Feds hawkish rhetoric at its most recent meeting reinforced expectations that interest rates will remain high for a longer period, increasing the opportunity cost of holding non-interest-bearing assets like gold.GFZ (German Center for Geosciences): A 5.5-magnitude earthquake has struck the Hindu Kush region of Afghanistan.U.S. AI-related stocks were mixed in pre-market trading. SpaceX (SPCX.O) fell more than 5%, Google (GOOG.O) and Tesla (TSLA.O) fell more than 1.5%, Intel (INTC.O) rose nearly 4%, Micron Technology (MU.O) rose 3.6%, and TSMC (TSM.N) rose more than 2%.The yield on the UK 10-year gilt fell 3.4 basis points to 4.806%.On June 22, WeRide (WRD.O), Geely Remote, and Kwoon Chung Bus Group signed a strategic cooperation agreement at the 2026 International Automotive & Supply Chain Expo (Hong Kong). The three parties will jointly develop native mass-produced Robotaxi models for the right-hand drive market based on the existing pre-installed mass-production Robotaxi GXR platform, and will promote the commercialization of Robotaxi mobility services in the right-hand drive market, starting in Hong Kong.

WTI struggles at $87 as recession worries probe OPEC's forecast and supply deficit fears intensify

Daniel Rogers

Sep 14, 2022 11:42

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After reverting from the weekly high, WTI crude oil traders seek clear direction around $87.50 during Wednesday's Asian session. However, the present hesitation in the price of black gold may be attributable to the mixed concerns regarding the demand-supply matrix.

 

The Organization of the Petroleum Exporting Countries (OPEC) indicated in a monthly report that oil consumption will climb by 3,1 million barrels per day (bpd) in 2022 and by 2,7 million barrels per day (bpd) in 2023, which is unchanged from last month. Despite obstacles such as rising prices, the news also highlighted indications that major economies were performing better than projected.

 

The news that the United States intends to replenish its emergency oil reserves, as well as the German and European move to control Russian oil and gas prices, could also be favorable for energy prices. In addition, rumors that the Western oil deal with Iran is a long way off are bolstering fears of a supply bottleneck and should have helped energy bulls.

 

Tuesday's US inflation statistics revived concerns about the Federal Reserve's fast rate hike and exacerbated recession concerns. Also acting as downward drivers for WTI crude oil are expectations of economic slowdown due to China and Russia-related concerns.

 

In spite of this, the US Consumer Price Index (CPI) for August increased by 8.3% year-over-year, surpassing market expectations by 0.1%. However, the monthly data increased to 0.1%, exceeding the -0.1% projected and the 0.0% shown in previous assessments. The core CPI, or CPI excluding food and energy, likewise exceeded the 6.1% consensus and 5.9% prior to printing at 6.3% for the month in question.

 

It should be mentioned that the weekly prints of the American Petroleum Institute's (API) industry inventory report also contributed to the commodity's downfall. The API Weekly Crude Oil Stock climbed to 6,035 million during the week ending September 9, up from 3,645,000 the previous week.

 

In the future, the price of black gold may stay under pressure due to a stronger US dollar and economic troubles. Before today's official weekly inventory data from the U.S. Energy Information Administration, however, the supply crisis concerns could test the bears (EIA). Thursday's US Retail Sales for the month of August and Friday's preliminary reading of the September Michigan Consumer Sentiment Index will also warrant close attention.

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