Gold Price Forecast : Gold price is preserving the previous rally, as it sits close to fresh two-month highs of $1,844 reached in early Asia. The bullish potential in the bright metal appears intact despite the persistent strength seen around the US Treasury yields across the curve.

Gold price benefited amid soaring inflation in the UK and Germany, as investors boosted its demand as an inflation hedge. Meanwhile, US President Joe Biden also called out the Fed to rein in the fastest pace of inflation in decades.

Looking ahead, the yields price action and the US dollar valuations will continue to play, with all eyes on the Eurozone final CPI release. The US weekly Jobless Claims and Existing Home Sales data could also offer some trading incentives.

Gold (XAU/USD) pares the stellar gains posted the previous day around $1,839, down 0.22% intraday during the initial Asian session as market sentiment sours.

The yellow metal jumped to the two-month high on Wednesday after the US Treasury yields stepped back from a multi-day peak and drowned the US dollar. However, the latest speech from US President Joe Biden renewed hopes of faster monetary policy normalization by the Federal Reserve (Fed), which in turn favored bond coupons and dragged the gold prices.

US President Biden highlights Chief Trade negotiator Katherine Tai’s efforts to placate Sino-American trade tussles. However, he also mentioned that the US is “’not there yet’ on possible easing of tariffs on Chinese goods”. Biden also said, “China is not meeting its purchase commitments.”

Further, comments favoring Federal Reserve (Fed) Chairman Jerome Powell’s push to recalibrate the support also raised concerns over faster rate hikes and balance sheet normalization, which in turn exerted additional downside pressure on the gold prices. Additionally, US President Biden directly warned Russia not to invade Ukraine and if they do they’ll lose access to the US dollar.

Elsewhere, uncertainty surrounding the US stimulus and the People’s Bank of China’s (PBOC) next moves also weighed on the gold prices. US President Biden signaled that the talks on the Build Back Better (BBB) stimulus is on but US Senator Joe Manchin rejects the comments.

Further, the PBOC is up for conveying its Interest Rate Decision at 01:30 AM GMT with market players equally divided amid the Chinese central bank’s early signals of a rate cut and the latest comments from PBOC Deputy Governor Liu Guoqiang. The PBOC official mentioned that the central bank “will keep yuan exchange rate basically stable.”

Against this backdrop, the US 10-year Treasury yields rose 4.5 basis points (bps) to 1.87% whereas the S&P 500 Futures drop 0.15% intraday to portray the risk-off mood at the latest.

Even so, gold prices do trade beyond the short-term key resistance and hence today’s PBOC verdict, as well as risk catalysts, will be important for the watch during Asia. Following that, US Jobless Claims, Philadelphia Fed Manufacturing Survey for January and Existing Home Sales for December will entertain gold traders afterward.

SYDNEY, Jan 19 (Reuters) – The dollar was firm on Wednesday after a rip higher in U.S. yields vaulted it up sharply on the euro overnight, putting it back above support levels that have held for the past few months in anticipation of rising U.S. interest rates.

The euro fell about 0.7% on Tuesday, its sharpest daily drop in a month, and is back on its 50-day moving average at $1.1323. Two-year Treasury yields have leapt 15 basis points over two sessions to cross 1% and benchmark 10-year yields stand at a two-year high of 1.8842%.

The dollar has also regained support levels against the Australian and New Zealand dollars and held sterling below its 200-day moving average. The U.S. Federal Reserve meets to set policy next week and traders are growing anxious about another hawkish surprise.

“A lot of (Fed) officials left us with hawkish impressions right before going quiet (ahead of the meeting),” NatWest markets’ strategist Jan Nevrusi said.

“After (Tuesday’s) price action, there is slightly more than one hike priced in for the March meeting, and going into next week, I would imagine it oscillates within the lower end of the 25-50 basis point range.”

Fed funds futures are pricing three more hikes in 2022. Analysts say dollar strength could extend if traders start expecting rates to rise not just faster but further as well.

“We expect the U.S. rate rethink – and this latest shift higher in yields reflects a push higher in the implied terminal rate, rather than just a faster pace of increases initially – to support the dollar in the first half of the year,” Societe Generale strategist Kit Juckes said.

Moves in the U.S. bond market unsettled equity investors, underpinning the safe-haven yen , which has held at 114.67 to the dollar. The U.S. dollar index rose 0.5% on Tuesday and held that gain at 95.768 on Wednesday.

Traders also have a wary eye on a delicate situation in Ukraine. U.S. Secretary of State Antony Blinken will seek to defuse a crisis with Moscow when he meets Russia’s foreign minister in Geneva this week.

The Australian dollar held below its 50-day moving average at $0.7187. It has struggled to break resistance just below 73 cents. The kiwi was pinned at $0.6771.

Sterling has taken a knock in recent sessions but will be in focus later on Wednesday when British inflation figures are due. Annual headline inflation is seen hitting an almost decade-high 5.2% and a surprise could trigger further bets on Bank of England rate hikes and renew the pound’s rally.

Reporting by Tom Westbrook; Editing by Himani Sarkar

NEW YORK, Jan 5 (Reuters) – U.S. stocks fell sharply on Wednesday, with the Nasdaq plunging more than 3% in its biggest one-day percentage drop since February, after U.S. Federal Reserve meeting minutes signaled the central bank may raise interest rates sooner than expected.

The S&P 500 fell more than 1%, its biggest daily percentage decline since Nov. 26, the first day of trading after news of the Omicron variant of the coronavirus.

The S&P 500 and Nasdaq quickly extended their declines after the release of the minutes, which investors viewed as more hawkish than they had feared. The Dow, which hit a record high earlier in the day, reversed course and ended down more than 1%. The selloff was broad, with all S&P sectors ending in the red, and Wall Street’s fear gauge, the Cboe Volatility index (.VIX), closing at its highest level since Dec. 21.

In the minutes from the Fed’s Dec. 14-15 policy meeting, central bank policymakers said a “very tight” job market and unabated inflation might require the Fed to raise rates sooner and begin reducing its overall asset holdings as a second brake on the economy. read more

“Indications that the Fed is very concerned about inflation could quickly create a view that the Fed will aggressively tighten in 2022,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York, calling the minutes “more hawkish than expected.”

The S&P 500 technology sector (.SPLRCT) fell 3.1% and was the biggest drag on the benchmark index, while the rate-sensitive real estate sector (.SPLRCR) dropped 3.2% in its biggest daily percentage decline since Jan. 4, 2021.

The Dow Jones Industrial Average (.DJI) fell 392.54 points, or 1.07%, to 36,407.11, the S&P 500 (.SPX) lost 92.96 points, or 1.94%, to 4,700.58 and the Nasdaq Composite (.IXIC) dropped 522.54 points, or 3.34%, to 15,100.17.

Rising interest rates increase borrowing costs for businesses and consumers, and higher rates can depress stock multiples, especially for technology and other growth stocks. Growth shares have been under pressure from a recent rise in U.S. Treasury yields. The Russell 2000 index (.RUT) also suffered its biggest one-day drop since Nov. 26, while the S&P 500 financials index (.SPSY)fell 1.3%, a day after it registered an all-time closing high.

Policymakers in December agreed to hasten the end of their pandemic-era program of bond purchases, and issued forecasts anticipating three quarter-percentage-point rate increases during 2022. The Fed’s benchmark overnight interest rate is currently set near zero.

Early in the day, an ADP National Employment report showed private payrolls increased by 807,000 jobs last month, more than double of what economists polled by Reuters had forecast. The report comes ahead of the Labor Department’s more comprehensive and closely watched nonfarm payrolls data for December on Friday.

Declining issues outnumbered advancing ones on the NYSE by a 4.32-to-1 ratio; on Nasdaq, a 4.22-to-1 ratio favored decliners. The S&P 500 posted 59 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 81 new highs and 307 new lows. Volume on U.S. exchanges was 12.18 billion shares, compared with the 10.4 billion average for the full session over the last 20 trading days.

Additional reporting by Stephen Culp in New York and Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by David Gregorio

Dec 13 (Reuters) – Wall Street ended lower on Monday, with shares of Carnival Corp and several airlines tumbling as investors worried about the Omicron coronavirus variant ahead of a Federal Reserve meeting later this week.

Travel-related stocks fell, with the fast-spreading variant accounting for around 40% of COVID-19 infections in London and at least one death in the United Kingdom. Norwegian Cruise Line Holdings (NCLH.N), Carnival Corp (CCL.N) and Royal Caribbean Cruises (RCL.N) all slumped, while the S&P 1500 airlines index (.SPCOMAIR) shed more than 2%.

“It’s transportation, restaurants, all the things that if it got bad enough that we started putting new restrictions on people, it would not be good for them,” said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta. “They have all been bid over the past several months by the idea that we were going to get back to business as usual.”

Most of the 11 major S&P 500 sector indexes fell, with only defensive sectors, including consumer staples (.SPLRCS), utilities (.SPLRCU) and real estate (.SPLRCR) gaining.

According to preliminary data, the S&P 500 (.SPX) lost 43.56 points, or 0.92%, to end at 4,668.46 points, while the Nasdaq Composite (.IXIC) lost 220.88 points, or 1.41%, to 15,409.72. The Dow Jones Industrial Average (.DJI) fell 313.98 points, or 0.87%, to 35,657.01.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 3, 2021. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 3, 2021. REUTERS/Brendan McDermid
Apple Inc (AAPL.O) dipped, even after J.P. Morgan raised its price target on the iPhone maker to the highest on Wall Street. The company is close to becoming the first in the world to hit $3 trillion in market value.

Investors expect an increasingly hawkish tone out of the Federal Reserve’s two-day meeting that wraps up on Wednesday. The U.S. central bank is expected to signal a faster wind-down of asset purchases, which could also usher closer a start to interest rate hikes.

“Everyone is focused on the Fed this week and what guidance we get in terms of bond purchases and interest rates. There’s an expectation that there will be an acceleration of tapering, and there’s a little anxiety leading up to that,” said Ryan Jacob, chief portfolio manager at Jacob Internet Fund.

A Reuters poll of economists sees the central bank hiking interest rates from near zero to 0.25%-0.50% in the third quarter of next year, followed by another in the fourth quarter. Positive updates about vaccines and antibody cocktails to combat the new COVID-19 variant, along with a recent reading on inflation that was in line with consensus, pushed the S&P 500 (.SPX) index to a record closing high on Friday.

Pfizer Inc (PFE.N) rose after it agreed to acquire Arena Pharmaceuticals (ARNA.O) in a $6.7 billion all-cash deal. Arena’s shares surged about 80%.

Reporting by Noel Randewich in Oakland, Califoria; Additional reporting by Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel, Shounak Dasgupta and Dan Grebler

NEW YORK, Dec 10 (Reuters) – Investors are bracing for the last Federal Reserve meeting of the year, with market participants hungry to learn how quickly the central bank plans to finish unwinding its bond-buying program and pick up signs of when it may start to raise rates in 2022.

Stocks are back at record highs following last week’s selloff – a market spasm brought on by worries over the Omicron variant of the coronavirus and comments from Fed Chairman Jerome Powell, who said the central bank may discuss speeding up the reduction of its $120 billion per month bond buying program at next week’s meeting.

There is potential for renewed volatility, however, if the Fed takes a more hawkish than expected view on rolling back the easy money policies that have helped stocks more than double from their March 2020 lows, including a rapid reduction in bond buying that clears the way for the central bank to raise rates sooner.

Markets could also be roiled if the Fed signals greater worry about inflation, which Powell said can no longer be described as “transitory.” Data on Friday showed consumer prices last month notched their largest annual gain in nearly four decades, bolstering the case for higher rates.

“The biggest factor in the equity market remains and will remain to be interest rates,” said Jack Ablin, chief investment officer at Cresset Capital Management.

Higher yields – which can rise on expectations of tighter monetary policy – can dim the allure of stocks by creating a greater discount for companies’ future cash flows, potentially pressuring valuations that are already elevated by historical standards.

The S&P 500 (.SPX), which has climbed 25% this year, is trading at 20.5 times forward 12-month earnings estimates, compared with its historic valuation average of 15.5 times, according to Refinitiv Datastream.

The yield on the benchmark 10-year Treasury note has climbed about 15 basis points from the start of the month to 1.49%, but is below the 1.776% it reached in March.

Some stocks have already been hit by higher rate worries this year, including technology and growth companies that thrived during 2020’s lockdowns.

The broader market, however, has generally tolerated tightening monetary policy, analysts at BofA Global Research said in a recent report, noting that stocks mostly climbed as the Fed normalized policy in the last decade.

The Fed last month began “tapering” its purchases of Treasuries and mortgage-backed securities at a pace that would have put it on track to complete the wind-down by mid-2022. Following Powell’s comments, investors now believe the Fed could quicken the pace of reductions that will end the bond-buying by March, which could allow the central bank to potentially start raising rates sooner. read more

Investors are also keen to learn the central bank’s view on the Omicron variant’s potential impact on economic growth or inflation.

One possible scenario outlined by UBS Global Wealth Management in a report sees the virus complicating supply-chain issues that have helped stoke inflation in recent months, bringing concerns the Fed may need to tighten monetary policy faster. The bank’s base case scenario, however, assumes the Omicron variant will not derail the recovery.

Mona Mahajan, senior investment strategist at Edward Jones, said the Fed meeting could bring more clarity to investors after an upsurge of volatility in recent weeks.

“It feels like the market has climbed two walls of worry already: Omicron and the path of the Fed,” she said. “I do think over the next couple of weeks we will get a little bit more certainty on both fronts.”

Reporting by Lewis Krauskopf in New York Additional reporting by Gertrude Chavez-Dreyfuss in New York Editing by Ira Iosebashvili and Matthew Lewis

WASHINGTON, Nov 23 (Reuters) – The administration of U.S. President Joe Biden announced on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude.

Biden, facing low approval ratings amid rising inflation ahead of next year’s congressional elections, has grown frustrated at repeatedly asking the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to pump more oil without any response.

“I told you before that we’re going to take action on these problems. That’s exactly what we’re doing,” Biden said in remarks broadcast from the White House. “It will take time, but before long you should see the price of gas drop where you fill up your tank, and in the longer-term we will reduce our reliance on oil as we shift to clean energy,” he said.

Crude oil prices recently touched seven-year highs, and consumers are feeling the pain of the increase in fuel costs. Retail gasoline prices are up more than 60% in the last year, the fastest rate of increase since 2000, largely because people have returned to the roads as pandemic-induced restrictions have eased and demand has rebounded.

Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of U.S. demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.

Japan will hold auctions for about 4.2 million barrels of oil, about 1 or 2 days worth of its demand, out of its national stockpile by the end of the year, the Nikkei newspaper reported on Wednesday. Details on the amount and timing of the release of oil from South Korea and China were not announced. Seoul said it would decide after discussions with the United States and other allies.

The price of oil rebounded on Tuesday, after falling for several days as rumors of the plans made their way into the market. Some analysts also attributed the market’s rebound to the lack of firm details out of China, though Reuters reported last week that the country has been working on such a release. Brent crude futures rose 3.3% on Tuesday to $82.31 a barrel. It was the first time that the United States had coordinated such a move with some of the world’s largest Asian oil consumers, officials said.

OPEC+, which includes Saudi Arabia and other U.S. allies in the Gulf, as well as Russia, has rebuffed requests to pump more at its monthly meetings. It meets again on Dec. 2 to discuss policy but has so far shown no indication it will change tack.

The group has been struggling to meet existing targets under its agreement to gradually increase production by 400,000 barrels per day (bpd) each month – a pace Washington sees as too slow – and it remains worried that a resurgence of coronavirus cases could again drive down demand.

Recent high oil prices have been caused by a sharp rebound in global demand, which cratered early in the pandemic in 2021, and analysts have said that releasing reserves may not be enough to curb further rises.

“It’s not large enough to bring down prices in a meaningful way and may even backfire if it prompts OPEC+ to slow the pace at which it is raising output,” said Caroline Bain, chief commodities economist at Capital Economics Ltd.

The administration has also pointed to a notable gap between the price of unfinished gasoline futures and the retail cost of gasoline, which has widened to about $1.14 a gallon from roughly 78 cents in mid-October. The White House urged the Federal Trade Commission to investigate the issue last week.

Biden’s political opponents, meanwhile, seized on the announcement to criticize his administration’s efforts to decarbonize the U.S. economy and discourage new fossil fuel development on federal lands.

The release from the U.S. Strategic Petroleum Reserve would be a combination of a loan and a sale to companies, U.S. officials said. The 32 million-barrel loan will take place over the next several months, while the administration would accelerate a sale of 18 million barrels already approved by Congress to raise funds for the budget.

Reporting by Timothy Gardner in Washington Additional reporting by Sonali Paul in Melbourne, Ghaida Ghantous in Dubai, Ahmad Ghaddar in London, OPEC team, Jarrett Renshaw in Philadelphia, Alexandra Alper and Jeff Mason in Washington, Jessica Resnick-Ault in New York and Aaron Sheldrick in Tokyo Writing by Edmund Blair, Alexander Smith and Richard Valdmanis Editing by David Gaffen, Carmel Crimmins, Cynthia Osterman and Matthew Lewis

HONG KONG, Nov 23 (Reuters) – Asia stocks were mostly lower on Tuesday, tracking a retreat on Wall Street after President Joe Biden picked Federal Reserve Chair Jerome Powell to lead the central bank for a second term, reinforcing expectations the U.S. will taper its stimulus soon.

MSCI’s gauge of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) fell 0.49%, while Hong Kong’s Hang Seng Index (.HSI) and China’s benchmark CSI300 Index (.CSI300) opened 1.1% and 0.2% lower, respectively.

Australia’s S&P/ASX 200 (.AXJO) outperformed with a 0.55% gain, boosted by miners and energy stocks. read more Japanese markets were closed for a public holiday. Riskier assets have been shaken up again over recent sessions amid surging COVID-19 cases in Europe and renewed curbs, dousing investor hopes of a quicker recovery in consumption and growth worldwide.

Germany’s outgoing Chancellor Merkel said the latest surge is the worst experienced by the country so far, while Austria went into a fresh lockdown on Monday.

Overnight on Wall Street, the S&P 500 (.SPX) and Nasdaq Composite (.IXIC) retreated from all-time highs after President Biden tapped Powell to continue as Fed chair, and Lael Brainard, the other top candidate for the job, as vice chair.

“The USD looks poised to hold onto its gains post-Powell renomination as it leaves room for markets to flirt with the idea of a faster taper,” said analysts at TD Securities in a note.

ANZ bank analysts concurred, saying in a note to clients that the Powell news stoked “expectations that tapering will accelerate and rates will begin to lift from June 2022.” The U.S. rates chatter kept the dollar index well supported near a 16-month peak. The greenback was also near a 4-1/2-year top versus the yen in early deals on Tuesday. read more

Powell’s current term, which has seen an emphasis on creating jobs from the prominent focus on inflation, has proven positive for risk assets, with the S&P gaining 69.7% since his appointment. U.S. Treasury yields were led higher by two-year notes, which typically moves in step with interest rate expectations. It hit its highest level since early March 2020.

In commodities, spot gold rose 0.19% to $1,808.4 per ounce at 0226GMT, paring Monday’s losses. Gold prices were under pressure as Powell’s nomination drove expectations that the central bank will stay the course on tapering economic support.

Oil prices were in the red again after a short rebound the previous day from recent losses on reports that OPEC+ could adjust plans to raise oil production if large consuming countries release crude from their reserves or if the coronavirus pandemic dampens demand.

Brent crude was down 0.21% at $79.53 a barrel and U.S. crude dropped 0.5% to $76.38 per barrel by 0226GMT. The U.S. Department of Energy is expected to announce a loan of oil from the Strategic Petroleum Reserve on Tuesday in coordination with other countries, Reuters reported earlier.

Reporting by Kane Wu in Hong Kong Editing by Shri Navaratnam

Nov 17 (Reuters) – European stocks closed at a record high on Wednesday, rising for the sixth straight session, as positive earnings reports helped overshadow worries that soaring gas prices were feeding into inflationary pressures.

The pan-European STOXX 600 (.STOXX) rose 0.2% after better-than-expected U.S. retail sales data lifted Wall Street equities on Tuesday. Profits of companies listed on the STOXX 600 are expected to rise 60.4% in the third quarter to 103.6 billion euros ($117.2 billion) from a year earlier, latest Refinitiv data showed, a dip from last week’s 60.7% estimate.

German medical tech firm Siemens Healthineers (SHLG.DE) gained 5.6% after raising synergy targets from its Varian acquisition earlier this year. read more Swiss luxury firm Richemont (CFR.S) extended its rally for a fifth day, up 0.6% to an all-time high, after a slew of price target raises by brokerages.

European stocks have eked out small gains this week to stay near record highs as strong earnings and signs of economic momentum counteract concerns around a fresh COVID-19 surge in Europe and inflation.

Data showed euro zone inflation rose to more than twice the European Central Bank’s target in October, with more than half of the jump due to a spike in energy prices. read more

“October’s euro-zone inflation data confirm that core price pressures are weaker than in other advanced economies,” said Jack Allen-Reynolds, senior Europe economist at Capital Economics. “While we don’t expect services inflation to rise a lot further, high input costs will push goods inflation up in the near term.”

The price of gas next month in the Netherlands , which is considered to be a benchmark for Europe, jumped almost 8% on Wednesday to hit 101.30 euros per megawatt-hour (MWh), its highest since Oct. 18. read more

“The longer the shortfall of Russian flows into Northwestern Europe lasts, the longer… gas markets will have to rely on high gas prices,” said Goldman Sachs in a note.

Polish parcel locker firm InPost’s (INPST.AS) shares plunged 13.2% after lowering its full-year outlook citing slower-than-expected e-commerce market growth. Travel and leisure stocks (.SXTP) fell 1.7%, dragged down by Swedish online gaming company Evolution (EVOG.ST).

Reporting by Anisha Sircar and Shreyashi Sanyal in Bengaluru; Editing by Shinjini Ganguli and Alexander Smith

SINGAPORE (Reuters) – Crude oil prices skidded on Monday, under pressure from expectations of higher supplies and weakening demand.

Brent crude futures fell 58 cents, or 0.7%, to $81.59 a barrel, as of 0151 GMT. U.S. West Texas Intermediate (WTI) crude lost 58 cents, or 0.7%, to $80.21 a barrel.

Both markets have dropped for the last three weeks, hit by a strengthening dollar and speculation that President Joe Biden’s administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices.

“The White House has been debating how to tackle higher inflation, with some officials calling for the strategic reserve to be tapped, or halting U.S. exports,” ANZ analysts said in a report.

U.S. energy firms this week added oil and natural gas rigs for a third week in a row with crude prices hovering near a seven-year high, prompting some drillers to return to the wellpad.

The oil and gas rig count, an early indicator of future output, rose by six to 556 in the week to Nov. 12, its highest level since April 2020, energy services firm Baker Hughes Co said on Friday.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) last week cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day (bpd) from last month’s forecast, as high energy prices hampered economic recovery from the COVID-19 pandemic.

Russia’s Rosneft, the world’s second-biggest oil company by output after Saudi Aramco, warned on Friday of a potential “super cycle” in global energy markets, raising the prospect of even higher prices as demand outstrips supply.

(Reporting by Naveen Thukral; Editing by Kenneth Maxwell)

Nov 11 (Reuters) – Oil prices settled slightly higher on Thursday, as the market grappled with a stronger U.S. dollar along with concern over increasing U.S. inflation, and after OPEC cut its 2021 oil demand forecast due to high prices.

Brent crude futures settled up 23 cents at $82.87 a barrel after falling during the session to $81.66. U.S. West Texas Intermediate (WTI) futures were up 25 cents to $81.59, bouncing off the session low of $80.20.

The energy complex traded higher toward the end of the session on confidence that post-pandemic demand would strengthen further in the coming months.

“Fresh highs lay ahead as the ingredients needed to place a top in this market remain elusive, namely global oil demand exceeding new production,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.

However, the rate at which demand returns may be dampened by higher energy prices according to the Organization of the Petroleum Exporting Countries (OPEC). The cartel said in a monthly report it expects oil demand to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, down 330,000 bpd from last month’s forecast. read more

“A slowdown in the pace of recovery in the fourth quarter of 2021 is now assumed due to elevated energy prices,” OPEC said in the report, also citing slow demand in China and India.

On Wednesday, U.S. data showed consumer price inflation rose in October at an annual rate of by 6.2%, the fastest in 30 years, driven largely by steeper energy prices. Expectations that the data would prompt U.S. rate hikes pushed the dollar higher and sent Brent and WTI crude down by 2.5% and 3.3%, respectively. read more

On Thursday, the dollar rose to almost 16-month highs against the euro and other currencies due to bets on interest rate hikes.

OPEC sees world consumption surpassing the 100 million bpd mark in the third quarter of 2022, three months later than forecast last month. The producer group has cited the uncertain path for demand as a primary reason why it will not increase supply to satisfy calls for more crude from the United States.

Brent crude has gained more than 60% this year and hit a three-year high of $86.70 on Oct. 25. However, oil prices appear to be consolidating below $85 a barrel, Norbert Rucker, head of economics at Julius Baer, said in a note.

“We could be looking at early signs of a fundamental transition towards an easing market, not least as oil demand should only grow gradually going forward with the pick-up in U.S. shale and petro-nation supply.”

Additional reporting by Ron Bousso; Additional reporting by Jessica Jaganathan; Editing Steve Orlofsky, Bernadette Baum and David Gregorio