OPEC+ can’t dent oil
Oil prices rallied overnight, despite OPEC+ announcing its pre-planned 400,000 bpd increase in monthly production. The omicron is omi-gone trade continued to hold sway, with its brighter outlook for world growth and oil consumption lifting oil prices, aided by larger than expected drawdown from private US API Crude Inventories.
Brent crude rose by 1.60% to USD 80.15 overnight, with WTI climbing by 1.60% as well to USD 77.20 a barrel. Some spec-drive long-covering has seen Brent ease back to USD 79.85, and WTI ease back to USD 76.80 a barrel. In the bigger picture the fall today looks corrective and if sentiment holds up and official US Crude Inventories fall tonight, oil should resume its upward march.
Brent crude has support at USD 78.60 and USD 77.75 barrel, its 100-day moving average (DMA). It has resistance here at USD 80.00, and then USD 82.00 a barrel. WTI has support at USD 75.75 and then USD 74.75, it’s 100-DMA. It has stout resistance at USD 77.50 barrel, and then USD 79.30.
Gold shows some fighting spirit
With US yields and the US dollar holding their gains but trading sideways, gold showed some fighting spirit, or perhaps blind optimism, to carve out a decent gain overnight. Gold rose by 0.75% to USD 1815.00 an ounce, where it remains in Asia. As ever, gold tends to run for cover at the first sign of trouble, so I would not say that gold has “weathered the storm” for one instant.
Gold has resistance at USD 1830.00 and USD 1840.00 an ounce, although it would be a huge surprise if we saw those levels this week. Support lies at USD 1798.00, which held once again overnight, followed by USD 1790.00 and USD 1780.00 an ounce. USD 1790.00 to USD 1820.00 is my call for the range this week.
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