Saxo Group Videos

Why Americans will pay more to drive and eat this summer

The price of oil is stabilising after a spike caused by increasing tension in Iraq. Saxo Bank's Head of Commodity Strategy, Ole Hansen, reports that so long as the main producing areas in the North and South of the country remain unaffected, we could see more long liquidation if WTI falls to USD 105.

Gasoline prices at the pumps haven't been this high for six years in the States and that'll impact ordinary Americans as the traditional driving season begins after the July 4th holiday. Coupled with that, cattle prices are at an all time high so those vacationers who also like to barbeque steaks are going to be hit in their wallets.

There may be some relief, however, as the US government has given the green light to the export of condensate. Condensate derives from shale and it needs to be refined before it's usable. The US doesn't export crude oil but it can sell refined products and this could ease price pressures in global markets over the coming months.

Gold has recently hit two month highs but it's stabilising in a range of between USD 1,300 and US 1,330 / ounce. Ole remarks that with US interest rates starting to move down and inflation picking up, lower 'real' interest rates could be potentially price supporting. .

02:32 minutes
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