Oil calm, gold rises

A quiet day for oil markets

Oil prices edged higher on Friday in New York, as the persistent squeeze in refined petroleum products in the US, and ever-present Ukraine/Russia risk underpinned prices, with China slowdown and US recession noise limiting gains. Mind you, in one article I read this morning, China’s recovery hopes were supporting oil while China’s slowdown hopes were capping gains. I guess it’s not just equity markets that are very confused right now. I do note, though, that the Brent crude premium over WTI reasserted itself into the end of the week, so perhaps the worst of the US diesel and gasoline squeeze is passed for now.

Brent crude rose by 1.10% to USD 112.55 on Friday, gaining another 0.70% to USD 113.30 a barrel in Asian trading. WTI rose 0.40% to USD 110.55 on Friday, gaining another 0.35% to USD 110.90 a barrel today. The price action is consistent with a market that is not strongly leaning one way or another at the moment.

Brent crude has resistance at USD 116.00 and support at USD 111.50 a barrel. WTI has resistance at USD 113.00 and USD 116.00 a barrel, with support at USD 108.00. Overall, I am expecting Brent crude to bounce around in a USD 111.00 to USD 117.00 range this week.

Gold rises on weaker US dollar

Gold prices rose on Friday, climbing just 0.24% to USD 1844.00 an ounce. In Asia, they have gained 0.42% to USD 1854.00 an ounce. Although gold’s rally has been impressive over the past week, it has yet to be proven that it is not just the result of a weaker US dollar. The true test of its resolve will be its ability to maintain gains when the US dollar starts rising again.

Nevertheless, the technical picture is swinging back to a further test of the upside with resistance at USD 1860.00 and then USD 1885.00 an ounce, its 100-day moving average. Support is at USD 1845.00 and USD 1840.00, followed by USD 1832.00 an ounce.

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Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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