Oil & Gas Talking Points:
- Crude oil prices[1] finds support as supply constraints cap losses
- Rising energy prices weigh on European policymakers as consumers fear higher prices, carbon dioxide shortages (CO2) and a cold winter
- Inflation[2], FOMC[3] Economic Projections and the BoE rate decision[4] remains at the forefront of risk sentiment
A range of fundamental factors[5] continue to weigh on the commodity sector[6], affecting prices for both oil[7] and gas[8] which have risen sharply throughout the year.
Although both the Federal Reserve[9] and the European Central Bank (ECB)[10] have continued to maintain a dovish stance throughout the global Covid-19 pandemic, rising commodity prices have raised fears that inflation may not be ‘transitory’, placing this week’s interest rate decision by the world’s two largest economies at the forefront of risk-sentiment.
DailyFX Economic Calendar[11]
However, supply bottlenecks were further exacerbated by disruptions in the production of WTI as oil[12] producers off the Gulf of Mexico struggle to recover from the detrimental damages caused by Hurricane Ida.
Read about How Crude Oil Prices React to Weather-Induced Disruptions Fears[13]
Meanwhile, the pandemic and a rise in natural disasters have caused European policymakers to shift their focus towards fighting climate change, forcing producers and suppliers of non-renewable energy to pay higher costs which have seen gas prices surge by approximately 280% this year.
Source: Refinitiv
US Crude Oil (WTI) Prices – Key Levels to Watch
After rebounding off of the August low ($61.70), oil supply shortages supported the strong rebound in crude oil prices, allowing bulls to temporarily drive prices higher.
However, after facing
