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Crude is higher; gold consolidates

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Oil

Crude oil prices are on the rise after stockpiles showed a slight increase and a substantial improvement in demand. ​According to the EIA crude oil inventory report, demand for gasoline and crude oil increased while distillates declined. ​Crude oil exports rose 21.6%, as shipments to foreign countries reached their highest level since November. ​The stockpiles are still high, reaching the highest level since March. However, gasoline prices have not been affected.

It seems that the oil market is inclined to take a bullish turn after major oil events. ​WTI crude should encounter resistance before the $83.50 mark, but if it does not hold we could see a small breakout.

The tech-driven selloff has caused a significant drop in risk appetite, which should have an impact on crude oil prices.

Gold

As traders wait to see what the Fed does to address growing concerns about a slowdown in macroeconomic growth, gold prices have been locked into consolidation mode. ​While risk aversion has taken over, gold is not in danger. The slowdown will confirm the disinflation trends and could result in rate cuts at year’s end. ​Until the Fed event, gold could trade in the $1935 to $1960 range.



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