Commodities Week Ahead: Oil, Gold Diverge Amid Energy Crunch, Fed Taper Plan – Investing.com

Commodities Week Ahead: Oil, Gold Diverge Amid Energy Crunch, Fed Taper Plan – Investing.com

The divergent paths for energy and precious metals will likely deepen this week as bulls seek ever higher prices from the global energy crunch while could take more bashing from the Federal Reserve’s stimulus taper plans.

With the White House announcing on Friday that it will lift COVID travel restrictions for fully vaccinated foreign nationals from Nov. 8, the potential for jet fuel demand is on the boil. Even before that, the International Energy Agency had estimated a shortfall of at least 500,000 barrels per day in global oil supplies versus demand by the end of the year.

Crude prices have virtually become a one-way trade after the Organization of the Petroleum Exporting Countries and their allies (OPEC+) decided two weeks ago not to add more than 400,000 barrels per day in output despite much higher demand envisaged in a global economy rapidly reopening from COVID lockdowns. 

While the White House’s planned lifting of travel restrictions into the US and the IEA’s upgrade of global demand estimates certainly have merits in pushing prices higher, oil also rallied this month on little more than the original OPEC+ announcement that has been recycled into a many-sided bull story,