Oil edges higher, gold directionless

Oil is steady in Asia

Oil prices rose slightly overnight as tight refined supplies persist in the US, and industrial action in Norway and a shutting down of a Libyan oil field continued supporting prices at recent highs. Brent crude finished 0.75% higher at USD 120.75 a barrel, and WTI rose 0.30% to USD 119.75 a barrel. Asia is once again adopting a wait-and-see position, with Brent and WTI unchanged in regional trading.

Oil prices remain at post-Ukraine invasion highs if you strip out the days when tanks rolled across the borders. 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 remain in heavy demand, with the refining logjam in refined products backstopping crude prices. A reopening China is also supportive of oil prices.

Brent crude has resistance at USD 122.00, and USD 124.00, with support at USD 116.00 and USD 112.50 a barrel. WTI has resistance at USD 121.00, with current support at USD 115.00 and USD 111.25 a barrel.

Gold’s flip-flop ranging continues

A weaker US dollar into the end of the New York session saw yet another mechanical response by gold, which rose 0.56% to USD 1852.50 an ounce in another snooze-fest session. In Asia, some US Dollar strength had sent it 0.25% lower to USD 1848.00 an ounce in an automatic response. Until we get a material move one way or the other by the greenback, gold’s range trading looks set to persist.

Gold has resistance at USD 1870.00, followed by the 100-DMA at USD 1889.00, and then USD 1900.00. 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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