UAE Oil Minister lifts oil prices
Oil prices shot higher overnight with the UAE oil minister warning that China’s reopening and the inability of OPEC+ members to pump at production targets posed more upside risks to oil prices. Tensions around Iran’s nuclear programme also diminished hopes of more Iranian crude on international markets. Finally, although US crude inventories rose by 2 million barrels, gasoline production was flat, keeping up the squeeze on refined products in the US.
That saw Brent crude ratchet higher by 2.40% to USD 123.75 a barrel, while WTI rallied by 2.25% to USD 122.45 a barrel. In Asia, oil prices have remained flat, with the lockdown of the Minhang district in Shanghai spurring China covid-zero part two fears, crimping demand in Asia today. That said, it is indicative of how tight supplies are that oil has not retreated on that news today.
That leaves the chart picture looking positive with the respective RSIs still not yet in overbought territory. Brent crude has traced out a series of highs at USD 124.25 marking initial resistance. After that, the road opens to USD 125.00 and USD 128.00 a barrel, bringing the Ukraine invasion highs back into sight. WTI has resistance at USD 123.15, the overnight high, and then USD 125.00 and USD 127.00 a barrel. Support is at USD 119.35 and USD 117.50 a barrel.
Gold remains in a coma
With little movement in the US dollar overnight, gold remained sedated as well, closing almost unchanged at USD 1853.35 an ounce. In Asia, a slightly lower US dollar has seen gold crawl modestly higher to USD 1855.00 an ounce. It seems that like currency markets, we are going to have to wait for tomorrow’s US Inflation data to create a directional move one way or the other. In the meantime, bring a good book.
Gold has resistance at USD 1870.00, followed by the 100-DMA at USD 1890.00, and then USD 1900.00, where I expect there to be options-related sellers in the first instance. Support is at USD 1837, USD 1830.00, and then USD 1780.00 an ounce. I do not discount a disorderly retreat if the latter fails. The wider USD 1830.00 to USD 1870.00 range seems set to continue until Friday.
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