Dear Subscriber,

Brent futures lose momentum after rising for three consecutive days

Brent halted its gain today, plunging by 1.34% to $76.40pb from $77.44pb in the previous trading day due to a surge in US crude inventories by about 3.6 million barrels and renewed worries of a banking crisis in the US. The decline in oil prices was further supported by the 7.9% drop in China’s imports for April, signalling weak demand from the second-largest consumer of crude oil. Moreso, the Bank of America has recently lowered its Brent price forecast for 2023 to $80pb from $88pb, which is not far-fetched from the current Brent price. 

Investors fly to safety (gold) as US banking crisis lingers

Investors fear that the lingering banking crisis in the US (First Republic Bank) will have more than the intended consequences, pushing them towards gold and other precious metals. Year to date, the price of gold, which is typically inversely related to the value of the US dollar, has spiked by 11.51% to $2,028.01/toz and is just slightly below (2.12%) the record high of $2,072/toz last reached on May 4, 2023. Expectations of a rebound in China’s demand are also keeping a floor on gold prices.

These and other burning economic issues were discussed on the Business Morning programme on Channels TV yesterday.

Enjoy your read!