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Crude oil to reach pre-pandemic demand in 2022

Inflation concerns ignored

Inflation concerns ignored

Global oil demand has been one of the major drivers of the crude oil markets recently, but beyond that there has been an extrapolation that demand should continue to go much higher. After the pandemic, it is anticipated that demand should go right back to previous levels, as economies around the world continue to reopen. After all, as the market starts to look at places like the European Union, the United Kingdom, and of course the United States reopening, it is anticipated that the glut of oil that had been accumulated during the pandemic will be worked through, and of course potential shortages could be par for the course.

The International Energy Agency stated on Friday that they anticipate that demand for crude oil should reach 100 million barrels a day by the end of 2022, which gets the demand for crude oil back to 2019 levels. This follows a report released by OPEC+ recently that stated they anticipated a growth of an additional 6 million barrels a day in demand by the end of this year. As a result, West Texas Intermediate crude has broken the $70 barrier.

Poll: Fed to announce QE taper in August or September

Poll: Fed to announce QE taper in August or September

According to a poll by Reuters, the Federal Reserve is likely to announce in either August or September a strategy for reducing its bond buying program but will not start cutting monthly purchases until early in 2022. A significant number of Federal Reserve observers also stated that the central bank would wait until later in the year before announcing a taper, now the main focus for markets fretting over the rising inflation being seen, as and into pandemic conditions in the United States is in sight.

Demand in the US economy has been scorching hot during the reopening, as inflation has reached the 5% threshold. 60% of economists polled by Reuters believe that this tapering will be announced in the fall, perhaps during the Jackson Hole symposium in August, which is an annual conference of central bankers, known for being a place where they do tend to drop hints.

Crypto to be offered in 401(k) accounts

Crypto to be offered in 401(k) accounts

In another sign that crypto is starting to become more mainstream, starting in July the 401(k) provider ForUsAll Inc. has stated that they will lot workers and retirement plans and best of the 5% of their contributions in crypto currency through Coinbase.

This allows crypto currency to be accessible to the general public in a longer-term “buy-and-hold” type of situation. The broadening reach of crypto should only bring more money into the marketplace, which of course is good for the longer-term outlook for crypto, as this could bring in a whole slew of new 401(k) companies offering access to one of the hottest new financial trends in years. As inflation rises, it is almost certain that people will start to look for alternative investments to stay above water, so the timing of this product almost certainly guarantees that other companies will follow suit.

Stocks

Stocks

Stock markets were basically on the quiet side for most of the session with the exception of Germany,
which found the DAX rising 7/10 of a percent. The S&P 500 is essentially flat midday in the United
States, while the NASDAQ is up just a paltry 1/10 of a percent. The Nikkei 225 was also very flat during
the session, showing that traders do not actually have much incentive to put positions on into the
weekend.

Index Change
S&P 500

S&P 500

-0.03

NASDAQ 100

NASDAQ 100

0.100

DAX 30

DAX 30

0.710

Nikkei 225

Nikkei 225

-0.030

Forex Pairs

Forex Pairs

Currency traders favored the US dollar going into the weekend, perhaps in a bit of short covering. The
Euro was down 6/10 of a percent, while the British pound was down ½%. The dollar climbed 4/10 of a
percent against the Japanese yen, while the Aussie got hit particularly hard, losing 80 basis points.

Index Change
EUR/USD

EUR/USD

-0.630

GBP/USD

GBP/USD

-0.490

USD/JPY

USD/JPY

0.410

AUD/USD

AUD/USD

-0.800

Commodities

Commodities

Commodity traders remain bullish for the reopening trade, but gold did take a little bit of a beating due
to the strengthening greenback, dropping 7/10 of a percent. Silver continues to get a boost from the
industrial trade, reaching 9/10 of a percent higher, while energy markets continue to thrive, with WTI
Crude Oil gaining over 1%, and natural gas gaining well over 4%

Index Change
Gold

Gold

-0.690

Silver

Silver

0.910

Crude Oil

Crude Oil

1.140

Natural Gas

Natural Gas

4.380

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