Oil prices have rebounded by over 20% in the last week during a period of highly volatile trading. The rally was sparked by growing evidence of declining US rig counts and multiple announcements of capital spending cuts by oil firms. This prompted short covering by traders, with news of higher than expected US oil stocks on Wednesday offset by recent disruptions in Libya and Nigeria.
The near-term outlook for oil prices is unclear but we continue to expect the price of Brent to end the year at around $60. Elsewhere, stronger than expected growth in US payrolls for January led to a predictable sell-off in the gold market. However, if Fed tightening is gradual and interest rates remain low, there would be plenty of scope for other, more positive factors to dominate.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services