CRUDE OIL & GOLD TALKING POINTS:
- Crude oil prices[1] rise as markets weigh OPEC production outlook
- Gold prices[2] locked in place as US Dollar[3], Treasury yields diverge
- Defensive pre-positioning for G7 summit may drive risk aversion
Crude oil prices enjoyed the largest upswing in a week as traders weighed up supply increase prospects ahead of an OPEC meeting later this month. Output caps imposed as part of a cartel-led scheme to drain a global supply glut may be relaxed, according to recent comments from Saudi Arabia and Russia.
That has pushed prices sharply lower in recent weeks, but traders now seem concerned that the two powerhouse producers may be met with resistance from other top suppliers. Iraq’s oil minister Jabbar al-Luaibi told Reuters that an output increase isn’t on the table at June’s gathering in Vienna.
Meanwhile, gold prices continued to struggle for lasting direction as the US Dollar and Treasury bond yields diverged, making for now-familiar conflicting cues[4]. The greenback found a haven bid while rates lost ground as risk appetite soured in pre-positioning for upcoming G7 leaders’ summit, as expected[5].
CRUDE OIL AT RISK AS G7 MEETING NEARS
The gathering in Quebec getting underway Friday will be firmly in focus from here. A series of tweets from US President Donald Trump criticizing Canada and France set an aggressive tone, paving the way for fireworks as virtually every world leader in attendance positions against US protectionism.
This means that defensive de-risking of portfolios may gain momentum in the final hours of the trading week. That
