Oil dips on Suez news, gold consolidates

Oil markets fall on Suez Canal developments

Oil markets rallied impressively on Friday, capping an extremely volatile week. Expectations of a move by OPEC+ to loosen production targets have receded, US recovery expectations continue to rise, and the ongoing Suez Canal situation all combined to boost prices on Friday. Brent crude rose 3.65% to USD64.40 a barrel, and WTI rose 4.0% to USD60.80 a barrel.

News on Monday that the Ever Given appears to have been refloated in the Suez Canal has sent prices immediately lower in Asia, with hopes rising that the delivery bottleneck to Europe will soon reopen. Brent crude has fallen 1.0% to USD63.75, and WTI has declined 1.35% to USD60.00 a barrel.

Oil’s volatile trading is set to continue, and if the Suez Canal situation is correct, oil’s recovery pre-OPEC+ may well be over. Given the volatility last week, Brent looks set to move to the lower end of its USD60.00 to USD65.00 a barrel range. Similarly, WTI is likely to drop to the lower side of its USD57.50 to USD62.50 a barrel weekly range.


Gold’s consolidation continues

Gold prices continue to quietly consolidate, ignoring the noise from other markets. On Friday, gold drifted 0.35% higher to USD1733.00 an ounce, giving up some of those gains this morning, falling slightly to USD1730.00 an ounce.

Gold’s overall price action remains construction, though, and the yellow metal is attempting to form a longer-term base, between its 61.80% and 50.0% Fibonacci retracements, setting the scene for a move back above USD1800.00 an ounce if all goes to plan.

Gold has support at USD1720.00 and USD1700.00 an ounce, followed by the 61.80% retracement in the USD1685.00 area. It has initial resistance at USD1755.00 an ounce, followed by the 50.0% retracement at USD1760.00 an ounce.

I expect gold to continue to range between USD1720.00 and USD1750.00 an ounce this week.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

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

Latest posts by Jeffrey Halley (see all)