Oil bulls wallowed in another day of losses to end last week, which represented the last trading day for the third quarter of 2022, after a surprisingly higher U.S. inflation print for August reinforced expectations for more super-sized Federal Reserve rate hikes.
Gold, on the other hand, saw its price perked up for the fourth day in a row on Friday, hitting a one-week high after a largely miserable September for longs in the game.
U.S. crudes saw a strong run-up between Tuesday and Wednesday, however, held the market in good stead for a small weekly gain in five, despite major losses for September and the third quarter, which represents the first quarterly loss for oil in two years.
Price Analysis
The United States benchmark, the West Texas Intermediate (WTI) settled at $79.49 per barrel, down 2.1% on Friday. For the week, WTI was up almost 1%. For the month, however, the U.S. crude benchmark was down 12.5%. For the third quarter, it was down 24%.
Oil And Gold Post Big Q3 Losses
The global benchmark, the London-traded Brent, traded at $85.14 per barrel, down 2.3% for the day. Unlike WTI, Brent was also lower on the week, losing 1.2% for a fifth straight weekly decline. For the month, Brent was down 11%, and for the quarter, it lost some 26%.
Although the yellow metal seems to be entering some sort of bull phase, for the month though it ended trading at $1,672.00 per ounce, up 0.2% on Friday.
The yellow metal, despite Friday’s bullish price action, closed negative for the month, down 3%, while for the quarter, it tumbled 7.5% for its worst quarter since the first quarter of 2021.
On the oil market, Ed Moya, an analyst at online trading platform OANDA, stated, “The Fed pivot is coming before the end of the year because severe economic weakness is around the corner as aggressive tightening will remain in place.
The crude demand outlook is not getting any favors from economic data or corporate reports. OPEC+ will have an easy job next week, but oil prices won’t catch a bid until energy traders are confident an aggressive reduction of output at around 1 million BPD will be delivered. Brent crude is poised to consolidate below the $90 level.”
On Gold, Moya explained, “Inflation expectations matter and … things are starting to look better for gold.”
Despite Moya’s optimism about gold going into October, some analysts were less impressed with bullion’s outlook. Reuters’ “BreakingViews” analyst, Robert Cyran, said in a commentary on Friday, “Despite the price recently hitting a two-year high, it has been an inferior hedge, and the opportunity costs have been high. An investment 10 years ago in the S&P 500 Index would have tripled.”