Category: Uncategorized

 Published: 9/22/2023 2:56 PM ET

Gold futures settled modestly higher on Friday even as the dollar stayed firm amid bets the Federal Reserve will keep rates higher for longer to combat inflation.

Gold attracted safe-haven buying amid concerns higher borrowing costs might result in global economic slowdown.

The dollar index, which climbed to 105.78 in the European session, briefly fell below the flat line around late morning, but recovered subsequently to 105.58, gaining more than 0.5%.

Gold futures for December ended higher by $6.00 at $1,945.60 an ounce.

Silver futures for December ended up $0.157 at $23.844 an ounce, while Copper futures for December settled flat at $3.6960 per pound.

The Fed kept interest rates unchanged earlier this week, but forecast another rate hike before the end of the year as well as keeping rates at elevated levels for longer than previously anticipated.

Other global central banks are also expected to keep interest rates higher for longer to cool price growth.

“Higher-for-longer remains kryptonite for gold but weakening global growth prospects is starting to attract some safe-haven flows towards bullion,” says Edward Moya, Senior Market Analyst at OANDA.

“Gold has shown that the $1900 level was a major line in the sand and now it appears to be poised to consolidate around the $1950 level. For gold to move back above the $2000 level, investors will need to see major dollar weakness which will be driven by evidence that the labor market is breaking,” Moya adds.

A Magna International Inc. joint venture in Michigan has laid off 650 employees as the automotive industry braces for widening strikes by the United Auto Workers union in the United States.

LM Manufacturing LLC, 49 per cent owned by Magna, supplies seats to Ford Motor Co.’s F-N -1.29%decrease Bronco factory near Detroit, where workers went on strike last week. UAW members are also on strike at two other U.S. factories, owned by Stellantis NV STLA-N -1.73%decrease and General Motors Co. GM-N -1.48%decrease, as the union pushes for new collective agreements.

The UAW is seeking 40-per-cent raises, a four-day workweek and the end to two-tier wage scales for new hires. The auto companies are resisting the demands as too rich, even as they post robust profits and spend heavily to produce electric vehicles.

On Sept. 15, workers walked out of Stellantis’ Jeep factory in Toledo, Ohio, and GM’s Chevrolet Colorado assembly line in Wentzville, Mo. About 12,700 of the 146,000 UAW members who work at the Big Three automakers are on strike. The UAW says it will shut down more plants by noon ET on Friday if no progress is made at the bargaining tables.

As the strikes disrupt the supply lines, GM on Wednesday closed a plant in Kansas and laid off 2,000 workers because of a lack of parts from its Wentzville factory. Stellantis laid off 370 workers at three parts factories in Indiana and Ohio that supply the Jeep assembly line in Toledo.

Dave Niemiec, a spokesman for Aurora, Ont.-based Magna, said the layoffs at LM in Detroit are temporary, and said it is too soon to say if other Magna operations are affected. “We have focused considerable attention on contingency planning to pro-actively address any temporary business disruptions to our operations,” he said. “If that time comes, we are prepared in terms of temporarily scaling back production on affected programs as efficiently as possible, while being equally prepared to ramp up quickly when ready.”

Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, said the U.S. strike is affecting some suppliers he represents in Ontario. There are about 12 companies in Ontario that directly supply the three plants on strike, he said, and this number could grow if the strikes spread.

“Next week’s production schedules for affected companies are going to be hairy,” Mr. Volpe said, declining to name the companies in Ontario. Linamar Corp. and Martinrea International Inc., Ontario-based parts makers with large U.S. operations, did not respond to requests for comment.

In Ontario, the plants operated by the Big Three are not yet affected by the U.S. strike.

Ford and the Unifor union that represents 5,680 of its workers in Canada reached a tentative agreement on Tuesday. The deal averted a strike at Ford’s factories in Oakville and Windsor, and parts warehouses. The agreement, expected to be put to a ratification vote this weekend, will set the template for Unifor’s negotiations with Stellantis and GM in Canada.

UAW workers are expected to rally at one of Ford’s two Louisville, Ky., assembly plants on Thursday evening in support of workers striking at other plants.

The city is home to a Ford assembly plant and its Kentucky truck plant. Ford chief executive officer Jim Farley has previously said the Kentucky truck plant, which assembles F-Series pickup trucks, is the company’s most profitable plant globally. Ford’s plant in Windsor makes engines for F-Series trucks.

Analysts expect plants that build high-margin pickups, such as Ford’s F-150, GM’s Chevy Silverado and Stellantis’ Ram, to be the next targets if the UAW walkout continues. Morgan Stanley analyst Adam Jonas estimated in a Thursday research note that a full month of lost production would cost the three automakers US$7-billion to US$8-billion in lost profits.

With files from Reuters

Published: 9/21/2023 7:25 PM ET

The Canadian stock market suffered one of its worst setback in recent months on Thursday as worries about, inflation, interest rates and outlook for economic growth weighed on sentiment, rendering the mood extremely bearish.

The benchmark S&P/TSX Composite Index ended with a loss of 423.07 points or 2.09% at 19,791.62, the lowest close in about four weeks.

As selling was widespread, all the sectoral indices fell. The Consumer Staples Capped Index, which dropped 0.92%, suffered the least damage. The Information Technology Capped Index, which was the worst hit, declined 3.39%.

Real Estate, Materials, Consumer Discretionary, Utilities and Industrials indices lost 2 to 2.4%, while Financials, Communication Services and Energy indices shed 1.84%, 1.79% and 1.48%, respectively. The Healthcare Index ended 1.07% down.

Rising concerns about Canadian inflation and the impact of higher interest rates on economic growth continued to hurt sentiment.

The Federal Reserve held its interest rate steady on Wednesday but said at least one more hike is likely by the end of this year. The Bank of England and the Swiss National Bank also left their rates unchanged, while Norway’s Norges Bank and Sweden’s Riksbank, both raised their rates by 25 basis points.

On the economic front, data from Statistics Canada showed new home prices in Canada edged up by 0.1% mom in August 2023, following a 0.1% decline in July. Year-on-year, the cost of new homes fell by 0.9% in August.

The last time Canada found itself in a tense geopolitical faceoff with an Asian economic powerhouse, it enjoyed ready support from allies in the U.S., Britain and Europe against China’s belligerence.

Now, Canada is locked in a worsening diplomatic feud with India over allegations that Indian agents were involved in the slaying of a Canadian citizen on Canadian soil.

But as Canada confronts India over the accusation, and watches as a trade relationship that only months ago held some promise of reversing decades of disappointment crumbles, Ottawa is unlikely to find a receptive audience in Western capitals, all of which have come to see India as a critical force to contain China’s global influence.

“I don’t doubt that Canada’s intelligence is strong, but if those countries still see India as a counterweight to China, then this episode may not change that momentum and Canada will find itself frozen out of the geopolitical alliances that are forming,” said Rohinton Medhora, former president of the Centre for International Governance Innovation.

“It will be Canada versus India and we cannot count on our allies to do anything to India to back us up.”

That has only heightened uncertainty about what this dispute could mean for the Canada-India economic relationship.

Few will argue that the relationship has lived up to its potential.

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While India is Canada’s eighth-largest trading partner, the $5.6-billion in exports shipped to India over the past year – largely made up of fossil fuels, fertilizer, wood and agricultural products – accounted for less than 19 per cent of what Canada exported to China, and less than 1 per cent of exports to the United States.

Canada’s foreign investment in India is also relatively paltry, despite large sums deployed by Canadian institutional investors and some companies. Over the past decade, roughly $21-billion of investment has flowed to India, but that’s just 0.2 per cent of Canada’s total foreign investment abroad.

Even so, a number of Canadian industries and sectors will be closely watching the dispute, which so far has led to the cancellation of Canada’s planned trade mission to India in October, as well as the suspension of talks toward a much-delayed trade agreement.

Among them is Canada’s pulse industry, which produces crops such as lentils and chickpeas.

“A potential area of vulnerability would be the imposition of arbitrary phytosanitary measures on agrifood products to exert pressure, because that has happened in the past,” said Jeff Nankivell, president and chief executive officer of the Asia Pacific Foundation.

In a statement, Pulse Canada, a national association that represents pulse growers, traders and processors, said roughly $400-million of Canadian lentils has been shipped annually to India over the past three years.

However, Jeff English, a spokesperson for Pulse Canada, said the organization would not comment on the “current bilateral relationship” between Ottawa and New Delhi.

All of the companies and business groups with exposure to India who were contacted by The Globe and Mail similarly declined to comment, a sign of the unusual circumstances that brought this dispute to the fore.

Canada’s mining sector is also bracing for possible impact from the Indo-Canadian tensions.

India accounted for 7.5 per cent of Teck Resources Ltd.’s revenue in 2022 and was the fifth-biggest market for Canada’s largest diversified mining company. The Vancouver-based miner is conducting an auction for its metallurgical coal business and among the bidders is Indian conglomerate JSW Steel.

If Teck reaches an agreement with JSW, the transaction would be subject to both a net-benefit review and a national security review by the federal government.

When asked if the current tensions would cause Ottawa to block JSW from buying Teck’s coal business, Laurie Bouchard, spokesperson for Industry Minister François-Philippe Champagne, declined comment, citing the confidentiality provisions of the Investment Canada Act.

For Saskatoon-based fertilizer giant Nutrien Ltd., India is an important export market for its potash production. India has no domestic potash production and is wholly dependent on imports.

Steve Hansen, analyst with Raymond James Ltd., said India imports about 2½ to three million tonnes of potash a year, representing about 4 per cent of the global market, and it is a major customer of Canpotex Ltd., the export organization owned by Nutrien and Tampa-based Mosaic Co., representing its third-largest international market.

Several of Canada’s largest pension funds are significant investors in India, and asset management giant Brookfield Asset Management Ltd. also holds investments in infrastructure and real estate.

Most often, the large pension funds are key backers for the construction and operation of infrastructure such as toll roads and cellphone towers, with an increasing focus on developing renewable power to help decarbonize India’s economic development.

Among the largest institutional investors in India is Canada Pension Plan Investment Board, the $575-billion fund that had more than $21-billion invested in India as of last September and has an office in Mumbai. The pension fund holds investments in Indian companies spanning banking, transportation logistics, e-commerce and other sectors; invests in the country through private equity funds; and owns stakes in office and industrial real estate.

Some pension funds have increased their focus on opportunities in India as a way of diversifying their exposure to Asia as geopolitical tensions with China rose.

Montreal-based Caisse de dépôt et placement du Québec had about $8-billion invested in India at the end of 2022, led by a team based in New Delhi. The Caisse’s investments are focused on infrastructure, including roads and renewable energy.

And a year ago, Ontario Teachers’ Pension Plan also opened an office in Mumbai in a push to get access to more investment opportunities and build long-term relationships in the country. At the time, CEO Jo Taylor highlighted India as one of the pension fund manager’s growth markets over the next five to 10 years, citing its “large, growing and dynamic economy, with openness to foreign capital.”

In 2014, insurer Fairfax Financial Holdings Ltd. began making significant investments in India through subsidiary Fairfax India Holdings Corp., which it took public in 2015. Fairfax India’s assets include a 57-per-cent stake in Bangalore’s international airport. The Toronto Stock Exchange-listed holding company has a $1.4-billion market capitalization.

Still, while the dispute unfolds, optimism about the future of Canada’s business ties to India continue to hold.

Even as federal Trade Minister Mary Ng last week postponed the trade mission to India that was meant to mark the ambitious start to Canada’s Indo-Pacific strategy, another trade mission was under way by officials from the Yukon.

As a result, Yukon Premier Ranj Pillai and his entourage, which included Victor Thomas, president of the Canada-India Business Council, were in New Delhi on Monday night as news broke that Prime Minister Justin Trudeau had accused the Indian government of helping to kill Hardeep Singh Nijjar, a Canadian citizen and supporter of an independent Sikh state in Punjab.

Mr. Pillai said his team was given no warning by the federal government that it would level its explosive allegations while they were there, though he credited the Office of the High Commission of Canada in New Delhi for supporting his team.

“My role here went from investment and talent attraction to ensuring that my team was comfortable and that I could bring down anxiety levels,” he said during a phone interview while his return flight to Canada waited to depart Tuesday night.

Despite the tense end to the trip, Mr. Pillai continues to praise the opportunity India presents as a vast market for Yukon’s critical-minerals sector and a source of potential investment as well as workers to meet shortages in its health care sector.

“Even this evening, the business community here is focused on ensuring that business continues to happen with Canada,” he said. “They see what’s happening as a significant and serious distraction.”

The union representing Canadian autoworkers at Ford has reached a tentative deal with the US automaker, keeping more than 5,000 union members on the job and providing some good news for an industry dealing with unprecedented labor disruptions.

Details of the deal between Ford and Unifor, the Canadian union, were not immediately available. But it is likely very good news for Ford, which is already grappling with a strike by more than 3,000 members of the United Auto Workers union and facing the possible expansion of the US strike this coming Friday.

Unifor had been prepared to go on strike late Monday night until a last-minute offer from Ford led to a 24-hour extension of its union contract and an extra day of negotiations.

“We leveraged our union’s most powerful weapon: the right to strike,” Unifor said in its statement Tuesday evening. “When faced with the prospect of an all-out strike… the company made a significant offer to the union.”

The union said its bargaining committee has unanimously recommended the deal to the union’s rank-and-file membership for a ratification vote. Ford was limited in its comment on the deal Tuesday evening ahead of that vote.

“To respect the ratification process, Ford of Canada will not discuss the specifics of the tentative agreement,” the company said in a statement.

A strike would have shut Ford’s three Canadian factories as well as numerous parts distribution centers, halting production of the Ford Edge and Lincoln Nautilus SUVs, which are built at an assembly plant outside of Toronto, as well as two models of the V-8 engine that are built in two engine factories in Windsor, Ontario, across the river from Detroit.

The lack of those engines would have halted production of two of the company’s top models at US factories – the best selling F Series pickups and the Mustang sports car. In some ways, a strike in Canada would have been more consequential for Ford sales than the strike at the one US factory in Wayne, Michigan, where more than 3,000 UAW members have been on strike since Friday.

It’s not immediately clear what impact this deal might have on the negotiations between the UAW and Ford, as well as General Motors and Stellantis, the automaker that builds vehicles for the North American market under the Jeep, Ram, Dodge and Chrysler brands.

The issues in the Canadian labor negotiations greatly mirrored the issues behind the UAW strike against those three automakers.

Unifor had been seeking improved wages and benefits for members, especially pension benefits, as well as job security guarantees as the automakers prepare to shift their lineup of vehicles from traditional gasoline-powered cars to electric vehicles, or EVs, in the years and decades ahead.

EVs typically take about 30% less labor than a traditional car to assemble, due to having fewer moving parts. Many engine and transmission plants are at risk since their products won’t be needed in an EV.

Neither Unifor nor Ford had revealed where their offers in the Canadian negotiations stood ahead of Tuesday’s agreement.

That’s not the case in the US talks. The companies, which are reporting record or near-record profits, all say they have offered the UAW members raises totaling about 20% during the life of the contracts, including immediate 10% raises.

The UAW, which began talks demanding an immediate 20% pay increase and raises totaling 40%, is insisting the companies’ offers are not enough to make its members whole for past concessions they gave the automakers and modest raises that did not keep pace with rising prices in recent years.

Published: 9/19/2023 2:45 PM ET

The Canadian market is down sharply on Tuesday due to widespread selling after data showing an acceleration in consumer price inflation raised concerns about interest rate hikes.

Data from Statistics Canada showed that the consumer price index rose 4% year over year in August, following a 3.3% increase in July. Economists had expected a 3.8% increase.

On a seasonally adjusted monthly basis, the CPI rose 0.6%, unchanged from the previous month. Core CPI, excluding food and energy, eased to 0.3% from 0.4% last month.

Mirroring widespread selling, all the sectoral indices are down in negative territory. Healthcare, materials, technology, industrials, energy and utilities shares are down sharply.

The benchmark S&P/TSX Composite Index is down 251.59 points or 1.22% at 20,241.24.

ATS Corporation (ATS.TO) is down more than 6%. Cameco Corporation (CCO.TO), Open Text Corporation (OTEX.TO), Kinaxis Inc (KXS.TO), Precision Drilling Corporation (PD.TO), Restaurant Brands International (QSR.TO) and Shopify Inc (SHOP.TO) are down 2.5 to 4%.

Bausch Health Companies (BHC.TO) is down more than 8%. Tilray Inc (TLRY.TO) is lower by about 3.2%.

Enghouse Systems (ENGH.TO) is down 4.2%. Materials stock Equinox Gold Corp (EQX.TO) is plunging more than 19%. Lithium Americas Corp (LAC.TO), First Majestic Silver Corp (FR.TO), First Quantum Minerals (FM.TO) and Iamgold Corp (IMG.TO) are down 4 to 6.5%.

Energy stocks Baytex Energy (BTE.TO), Birchcliff Energy (BIR.TO), Vermilion Energy (VET.TO), Africa Oil Corp (AOI.TO) and Crescent Point Energy (CPG.TO) are down 2 to 3.4%.

Fortis Inc. (FTS,FTS.TO) is down 2.3% after the company announced its 2024-2028 capital plan of C$25.0 billion. The five-year capital plan is expected to increase midyear rate base from C$36.8 billion in 2023 to C$49.4 billion by 2028, translating into a five-year compound annual growth rate of 6.3% on a constant foreign exchange basis.

Cenovus Energy Inc. (CVE) said on Tuesday that it has increased its previously announced Pool 2 maximum notes offering to $500 million from $250 million. The stock is down by about 1.5%.

Aurora Cannabis Inc. (ACB.TO) is gaining 2.6%. The cannabis producer announced today that it has received approval to transfer the listing of its shares to the Nasdaq Capital Market from the Nasdaq Global Select Market, with effect from September 19.

The transfer is expected to allow the firm to seek an additional 180 days to regain compliance with the minimum bid price requirement for its Nasdaq listing.

Canada’s annual inflation rate accelerated for the second month in a row, increasing pressure on the Bank of Canada to raise interest rates again shortly after it announced its second pause to monetary policy tightening this year.

The Consumer Price Index rose 4 per cent in August from the year before, up from 3.3 per cent in July and the highest annual inflation rate since April, Statistics Canada said Tuesday. Bay Street analysts were expecting 3.8 per cent inflation in August.

The increase was driven by gasoline prices, which have surged in recent months following oil production cuts by Saudi Arabia and Russia. But it was more than just energy prices pushing up headline inflation.

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Rent was up 6.5 per cent year-over-year in August, compared to 5.5 per cent in July, and mortgage interest costs continued to tick higher for homeowners. Grocery price inflation decelerated to 6.9 per cent in August from 8.5 per cent the preceding month, but food inflation remains far above most other components of the consumer price index.

Most worrying for the Bank of Canada: Core measures of inflation, which filter out volatile price movements to get at underlying inflationary pressures, moved markedly higher. The average of the Bank of Canada’s two favourite core inflation measures rose to 4 per cent in August from 3.75 per cent the previous month. That’s twice the central bank’s 2-per-cent inflation target.

“We all knew that the extended back-up in gasoline prices was going to be a headache for headline CPI and inflation expectations, but the inconvenient truth is that core has suddenly heated up as well,” Bank of Montreal chief economist Douglas Porter said in a note to clients.

“There’s still lots of data to go before the [Bank of Canada] next decides on rates (October 25), including another swing at the CPI. Unfortunately, we suspect that with oil firing higher and core inflamed again, that report will be no better than today’s.”

Earlier this month, the Bank of Canada halted its monetary policy tightening campaign after 10 interest rate increases over the past year-and-a-half. This decision was taken after a string of data showed that economic growth in Canada has begun to stall and the labour market is cooling.

After the announcement, Bank of Canada Governor Tiff Macklem said that the bank’s inflation target was “now in sight” and that interest rates “may be sufficiently restrictive,” although he left the door open to more rate increases if inflation proved stubborn. Higher interest rates make it more expensive for individuals and businesses to borrow money and service their debts, with the goal of reducing spending throughout the economy to lower upward pressure on prices.

“August’s inflation reading stands in contrast to other measures that have shown momentum cooling in Canada’s economy,” Leslie Preston, a senior economist at Toronto Dominion Bank, wrote in a note to clients.

“The housing market, and new home construction cooled in August, and the unemployment rate has risen half a percentage point over the past few months. Fortunately, the Bank of Canada will see another inflation report before its next rate decision on October 25th. We expect further signs of slowing will help the bank to continue to stand on the sidelines.”

Interest rate swap markets, which capture market expectations about future monetary policy decisions, are now pricing in around a 40 per cent chance of another rate hike in October, according to Refinitiv data. Before the August inflation data, markets were putting the odds of another rate hike at about one-in-five.

The inflation data caught traders by surprise. Bond prices were hammered and yields surged Tuesday morning as traders scrambled to increase their bets on interest rates moving higher and staying high for longer. The yield on two-year Government of Canada bonds jumped to 4.88 per cent, topping recent highs reached in July. The Canadian dollar initially surged, rising by about half a cent against the U.S. dollar, before giving back around half of that gain by early afternoon.

Inflation has come down considerably over the past year, when it hit a four-decade high of 8.1 per cent last June. But Tuesday’s data shows that the price for many goods and services continues to rise quickly, adding to widespread affordability concerns.

Food was one of the few bright spots in the August inflation data. Annual grocery price inflation fell to 6.9 per cent from 8.5 per cent in July. On a monthly basis, grocery prices were down 0.4 per cent. Prices for fruit, cereal and chicken rose at a slower year-over-year pace than in July; prices for frozen beef, coffee and tea and sugar and confectionary rose more rapidly.

Food inflation has become a major political issue. On Monday, the federal government summoned executives from Canada’s large grocery chains to Ottawa for a meeting about stabilizing food prices. The government has threatened unspecified tax measures if grocery stores don’t work to get food prices under control.

Mortgage interest costs, which have risen alongside the Bank of Canada’s interest rate increases, remain the single biggest driver of CPI inflation. They were up 30.9 per cent in August compared to a year before, which is a touch higher than in July.

This has led to accusations from some politicians that the Bank of Canada itself is the key driver of inflation. Bank officials disagree, arguing that pushing up prices in this one component of the index is necessary to slow price increases in other parts of the index. “It’s true that if we hadn’t raised interest rates, mortgage costs might be lower today, but inflation throughout the economy would be a much bigger problem for everyone,” Mr. Macklem said in a speech two weeks ago.

Sharon Kozicki, a deputy governor at the Bank of Canada, is scheduled to deliver a speech at 2pm ET on Tuesday, which will likely touch on today’s inflation numbers.

Published: 9/18/2023 1:57 PM ET

Gold futures settled higher on Monday as the dollar shed ground ahead of the Federal Reserve’s monetary policy meeting.

The Fed, which is scheduled to announce its rate decision on Wednesday, is widely expected to hold rates unchanged but traders will pay close attention to the accompanying statement and the central bank’s projections for clues about the outlook for rates.

While CME Group’s FedWatch Tool is currently indicating a 99% chance the Fed will leave rates unchanged this week, the outlook for the November meeting is somewhat more mixed.

The FedWatch Tool is indicating a 69% chance rates will remain unchanged in November but a 30.7% chance of another quarter point rate hike.

The dollar index dropped to 105.02 in the New York session.

Gold futures for December ended higher by $7.20 or about 0.4% at 1,953.40 an ounce.

Silver futures for December ended up $0.112 at $23.498 an ounce, while Copper futures for december settled at $3.7790 per pound, down $0.0220 from the previous close.

On the U.S. economic front, the National Association of Home Builders released a report showing homebuilder confidence in the U.S. has unexpectedly deteriorated in the month of September.

The report said the NAHB/Wells Fargo Housing Market Index slumped to 45 in September after tumbling to 50 in August. Economists had expected the index to come in unchanged.

The housing market index dropped below the key breakeven measure of 50 for the first time in five months, as persistently high mortgage rates above 7% continue to erode builder confidence.

Oil prices rose on Tuesday for a fourth consecutive session as weak U.S. shale output spurred further concerns about a supply deficit stemming from extended production cuts by Saudi Arabia and Russia.

Global oil benchmark Brent crude futures were up 41 cents, or 0.43 per cent, to $94.84 a barrel by 0751 GMT. After breaching $1 gains, U.S. West Texas Intermediate crude futures were up 92 cents, or 1.01 per cent, to $92.40.

Prices have gained for three consecutive weeks, and both benchmarks are around 10-month highs.

U.S. oil output from top shale-producing regions is on track to fall to 9.393 million barrels per day (bpd) in October, the lowest level since May 2023, the U.S. Energy Information Administration (EIA) said on Monday. It will have fallen for three months in a row.

Those estimates come after Saudi Arabia and Russia this month extended a combined supply cuts of 1.3 million bpd to the end of the year.

Prices are being supported by concerns over supply tightness and technical factors, said Kelvin Wong, a senior market analyst at OANDA in Singapore.

“(There has been) a persistent short-term uptrend seen in the WTI crude oil futures where prior dips had been held by its 5-day moving average since 29 August …(which is) now acting as a key short-term support at around $89.90 per barrel,” Wong noted.

“Oil’s ascent into overbought territory leaves the market vulnerable to a correction,” analysts from National Australia Bank wrote in a client note, pointing to volatility after speeches from Saudi Aramco CEO Amin Nasser and Saudi Arabia’s energy minister on Monday.

The Aramco CEO lowered the company’s long-term outlook for demand, now forecasting global demand to reach 110 million bpd by 2030, down from a previous estimate of 125 million bpd.

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman on Monday defended OPEC+ cuts to oil supply, saying international energy markets need light-handed regulation to limit volatility, while also warning of uncertainty about Chinese demand, European growth and central bank action to tackle inflation.

Interest rate decisions are due this week from the central banks of the U.S., Britain, Japan, Sweden, Switzerland and Norway.

This “will do nothing to calm nerves as the clash between considerably reduced supply and less than reassuring economic outlook continues,” said PVM Energy’s Tamas Varga.