12.05.2022: Draghi says EU companies can pay for gas in rubles - Outlook for oil, gold, and RUB

The statement by Italy’s Prime Minister somewhat calmed the markets, which affected oil prices and resulted in their slight decline. Mario Draghi said yesterday that Germany’s top gas importer had already paid in rubles.
The purchase of energy products for the Russian currency doesn't breach or undermine EU sanctions, he added. In addition, the world’s media organizations published a number of articles about the impossibility of an immediate refusal of Russian energy supplies, at least in the foreseeable future. It turns out that Europe will not impose a ban on Russia's energy sector. At the same time, there will be no supply disruptions as Europe will pay in rubles. This means that the world does not risk facing an energy crisis of unprecedented proportions coupled with turmoil in global markets and the situation is stabilizing, which has somewhat reassured investors.
However, Ukraine has reportedly reduced flows of Russian natural gas through its territory to Europe. True, there is no accurate information on this issue yet since subsequent statements by various officials contradict each other. Thus, according to Gazprom, the company continues to supply gas to Europe via Ukraine in the amount of 72 million cubic meters, which is even above the average figure for the past few days. Anyway, this situation raises concerns that keep commodity prices, including oil, from further decline as well as creates preconditions for their resumed rally.
According to the trading chart, Brent crude oil managed to pare some early losses, rallying by about 6% in just one day to settle at $108 per barrel. Such a significant move appeared to have added to long positions, which led to a slowdown in the upward cycle. The benchmark will most likely extend gains if the price consolidates above the level of $108.50.
Mario Draghi's words not only reassured investors regarding the prospects for the energy market but also became an additional driving factor for the Russian currency. After all, if Germany is ready to pay for gas in rubles, other countries of the European Union will follow suit. This means that demand for the Russian currency is supposed to increase.
Nevertheless, the ruble is still extremely overbought. This imbalance is increasingly becoming a concern for market participants. So, any negative factor may well drag the ruble down. This is largely due to the fact that a local correction in the Russian currency is long overdue.
Meanwhile, the dollar/ruble pair failed to break above the level of 70. The number of short sellers outweighed those buying the greenback again. As a result, the quote slid by 5%, returning to the area of 66.00, with bearish mood prevailing in the market.
After rather solid gains in early trade on Wednesday, gold's rally paused around $1,850 per ounce. At the moment, the yellow metal is standing still. Moreover, there are no signs which way it will head further.
Apparently, investors are awaiting the US Federal Reserve’s comments on inflation. US inflation is decreasing, but at a slower rate than expected. The fact is that if a fall in consumer prices recorded yesterday is not enough for the Fed to revise the pace of monetary tightening, investors should continue to get rid of various assets, including gold, and focus exclusively on the dollar. If the regulator does not raise interest rates as quickly as in recent months, gold has a chance of returning to local highs. However, the situation is uncertain. Therefore, the metal is likely to keep moving around the current levels.

00:00 Introduction
00:19 Sanctions and energy crisis
01:09 Ukraine blocked the transit of gas from Russia to Europe?
01:55 Brent
02:23 One of the factors for the strengthening of the ruble
02:48 USD/RUB
03:26 Gold
03:42 Fed interest rate
04:25 Results

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[buatakun]

When a neutral international medium of exchange is used as a political tool to pressure a country, other countries have the right to determine their own medium of exchange. How many countries are threatened by this abuse? Should we keep using the dollar but we are not independent? Or look for alternative currencies that cannot be used as a political tool to pressure any nation. It's up to you people of the world to decide.