Oil Demand Surges as Central Banks Hoard Gold

China's oil demand has surged in recent weeks, with Shanghai crude trading above $100 per barrel at a premium to Brent. This price increase may reflect tactical restocking rather than broad underlying demand recovery.

The US national average gasoline prices reached $4.15 per gallon over Labor Day, marking the first time it surpassed this threshold. Central banks purchased 23 tonnes of gold in July, led by China and Poland. The World Gold Council reported that 74% of central banks expect reduced US dollar holdings over five years.

In related news, former AQR research head Aaron Brown noted that foreign central banks have reduced Treasury holdings at the New York Fed by roughly $82 billion since February. He also pointed out that global central banks now hold more gold than US government bonds. London copper futures exceeded $14,000 per ton in response to near-term physical tightness and mine supply cuts.