The bullish rally in the oil market | 15 October 2021

#WTI:

Oil jumped to a three-year peak after OPEC+ confirmed it would stick to its current output policy as demand for petroleum products rebounds, despite pressure from some countries for a bigger boost to production. OPEC+ agreed in July to boost output by 400,000 barrels per day each month until at least April 2022 to phase out 5.8 million bpd of existing production cuts. OPEC+ likes the rise in oil prices, and they do not want to increase the production of black gold, thereby increasing the structural shortage of supply in the world market.

Trading recommendation: Buy 79.50 and take profit 82.90.

#SP500:

The U.S. added fewer jobs than forecast for a second month in September, signaling weakness in the labor market recovery and complicating a potential decision by the Federal Reserve to begin scaling back monetary support before year end. Nonfarm payrolls increased 194,000 last month after an upwardly revised 366,000 gain in August, a Labor Department report showed. The jobs figures risk not satisfying the Federal Reserve’s “substantial further progress” criteria for labor market improvement, indicating the central bank could delay its plan to begin tapering asset purchases by year-end. This is a positive signal for the stock market.

Trading recommendation: Buy 4323 and take profit 4429.

XAUUSD:

The dollar, which normally moves inversely to gold, inched up and the benchmark U.S. 10-year Treasury yields hit its highest level since early June 2021. The U.S. Labor Department’s jobs report, released last Friday, showed that non-farm payrolls were at 194,000, and the unemployment rate was 4.8%, in September. Although the U.S. job market will continue to feel COVID-19's impact, it is too soon to say it is “stalling,” San Francisco Fed President Mary Daly said. The jobs figures risk not satisfying the Federal Reserve’s “substantial further progress” criteria for labor market improvement, indicating the central bank could delay its plan to begin tapering asset purchases by year-end. Chair Jerome Powell said after last month’s policy meeting that “a reasonably good employment report” for September would be needed meet that test.

Trading recommendation: range 1740 - 1781.