EU Stimulus lifts Oil

July 21, 2020

The European Union adopted an $857B fiscal stimulus package. The devil is in the details, as in-fighting amongst member nations was chronicled. Additionally, the EU Parliament must ratify the deal. 


For Oil producers and consumers, the deal means higher oil prices for two reasons. Additional stimulus will help the near and intermediate term outlook for demand by getting the European bloc back on its feet. And just as importantly, round after round of stimulus by European, Asian and American counterparts assures side by side devaluation of currencies. Gold is on a nearly 9 year high. Other industrial commodities will get a lift from more paper chasing the same hard assets.    



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