13.05.2022: World on brink of energy crisis - Outlook for oil, gold, and RUB
Continuing uncertainty about energy supplies to Europe is driving energy prices, including oil, higher. Kyiv's decision to suspend the flow of gas through a transit point bringing Russian fuel to Europe is also sending a new wave of energy jitters through Europe. Besides, Finland's intention to seek NATO membership invites new threats from Moscow.
If Finland joins NATO, gas supplies may be cut off as early as Monday, a number of officials said yesterday. Naturally, all this raises concern over possible energy shortages in Europe and around the world among market participants. So, if the geopolitical situation does not stabilize, oil will continue to gain value.
From a technical point of view, Brent crude oil futures edged up again after a short-term pullback. As a result, the quote reached the level of $110 per barrel. The current level of resistance is putting pressure on buyers, which is why the volume of long positions is decreasing. The benchmark will most likely enter a new wave of growth if the price consolidates above the 110 mark at least on the four-hour chart. Until then, the risk of a rebound remains.
Rising energy prices are provoking a further ruble strengthening. After all, Russia is the world’s largest energy supplier. Without Russian oil and gas imports, the world economy could fall into its deepest recession in decades. The geopolitical situation is evolving in such a way that many investors are seriously considering switching to ruble payments for Russia's energy deliveries, which is currently the main driving power for the Russian currency.
Oddly enough, higher global risks and rising tensions had almost no impact on gold. Moreover, instead of gaining value, the yellow metal extended a downtrend, coming closer to the mark of $ 1,800 per ounce. Gold futures went down again, hitting a new local low of their downward cycle. However, the support level of 1,800, which bears are likely to face, may well stem a bearish mood.
Such market dynamics can hardly be attributed to mere expectations of further interest rate hikes in the United States. This factor has long been priced in by the market. Probably, in the face of acute energy shortages and concerns about hunger becoming widespread in different parts of the world, even safe-haven assets are becoming worthless. In such a situation, only strategic resources are of importance. Demand for gold is falling since the current realities are forcing large investors to shift their focus to more significant assets.
00:30 Sanctions and energy crisis
FX Analytics - https://www.instaforex.com/forex_analytics
Forex Calendar - https://www.instaforex.com/forex_calendar
Forex TV from InstaForex - https://www.instaforex.com/instaforex_tv