Oil is steady in Asia as Saudi Arabia hikes prices
Oil prices ignored Fed tightening nerves after the US data, rallying strongly with the relaxing of China Covid curbs, with its ensuing return of oil demand, the story driving oil markets. Brent crude rose 2.70% to USD 121.25 a barrel, with WTI rising 2.35% to USD 120.35 a barrel. There seems to be some confusion with pricing feeds on oil futures today, possibly as platforms shift their front-month futures from June to September. Brent crude has eased slightly in Asia to USD 120.45 a barrel, while WTI has eased to USD 119.65 a barrel. While China relaxing Covid curbs and Saudi Arabia hiking selling prices to Asia and Europe are supporting prices, potential Venezuelan shipments to Europe are providing temporary resistance.
Whichever way you look at it though, both Brent and WTI prices are nearing post-Ukraine highs, stripping at the days of the initial hostilities themselves. Returning Venezuelan and Libyan production to Europe and North America, should it occur, will not be material enough in the shorter term to force prices lower. Refining margins globally suggest that demand for petrol and diesel remains in heavy demand, with the refining logjam in refined products backstopping crude prices.
Additionally, the damp squib OPEC+ meeting outcome, with some production bones thrown to some angry dogs, and a potential recovery in demand from mainland China which has got on top of omicron, provides yet more reasons to believe that physical demand will keep prices elevated.
Brent crude has resistance at USD 122.00, and USD 124.00, with support distant at USD 116.00 and USD 112.50 a barrel. WTI has resistance at USD 121.00, with now distant support at USD 115.00 and USD 111.25 a barrel.
Gold’s flip-flop ranging continues
Strong US data saw the fast-money longs in gold take fright and head to the exit door on Friday. That pushed gold sharply lower by 0.95% to USD 1851.00 an ounce as the US dollar rallied. In Asia, a moribund session has seen gold add 0.25% to USD 1855.70 an ounce.
The chart picture shows gold is now eroding resistance at USD 1870.00, touching USD 1874.00 an ounce on Friday. Overall, though, resistance at USD 1870.00 remains intact, followed by the 100-DMA at USD 1889.00, and then USD 1900.00. So, gold has plenty of wood to chop on the upside. Support is at USD 1844.00, USD 1830.00, and then USD 1780.00 an ounce. I do not discount a disorderly retreat if the latter fails.
Gold remains at the mercy of intraday direction moves by the US dollar it seems.
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