Crude oil increased in price despite the mobilization of strategic reserves

The mission of the US representatives was successful in getting several countries to the release of strategic oil reserves. However, the increase in the supply of crude oil probably turned out to be too small and it was not possible to achieve the desired effect - instead of the expected price reductions, the price of crude oil increased.

WTI Crude Oil remained around USD 78,5 per barrel on Wednesday, increasing by over 2%. The US-coordinated efforts to release strategic oil reserves did not help. The US has announced a release of 50 million barrels, India is expected to release 5 million barrels and the UK may release 1,5 million barrels. Japan it also confirmed on Wednesday that it would release some of the oil reserves allowed by Japanese law, and the Nikkei announced the release of 4,2 million barrels from around 490 million domestic stocks.

Analysts suggest that a coordinated release of stocks has already been factored into prices. Goldman Sachs adds that the estimated 70-80 million barrels of additional supply are less than the more than 100 million barrels expected by the markets. OPEC He threatened that he might reduce production in connection with the planned operation and ultimately it would be useless to release stocks.

Sale of gold

Gold prices remained below $ 1800 an ounce on Wednesday, down about 5 percent. from the recent summit. Reassignment could be the reason Jerome Powell's nomination for the position of chairman of the Federal Reserve, which may have contributed to the increase in the value of the dollar and bond yields.

The news of Powell's next term in office potentially strengthened expectations for further monetary tightening and interest rate hikes in the US. At least three Fed officials openly discussed the faster pace of reducing the asset purchase program.

Gold could be gaining as investors hedged against inflationary risks and looked for safe assets in the face of uncertainty about the economic and political outlook. However, higher interest rates can raise the opportunity cost of a metal that bears zero interest, potentially reducing its attractiveness.

New Zealand interest rates are up

Reserve Bank of New Zealand picked up the official interest rate (OCR) by 25 basis points, down to 0,75% It was the second rate hike in a row in the face of rising inflationary pressure and the loosening of restrictions on COVID-19. The bank's council mentioned that further monetary policy tightening was expected, taking into account the medium-term inflation and employment outlook.

Inflation in New Zealand is projected to exceed 5%. in the next three quarters, reaching the highest level of 5,7 percent. in the first quarter of next year, which may be due to higher crude oil prices, rising transport costs and supply shortages.

In QXNUMX this year. CPI inflation increased in New Zealand by 4,9 percent. y / y, well above the central bank's target of 1-3%. The central bank has signaled that the interest rate will hit 2,6 percent. by the end of 2023 and will be higher until December 2024.