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Crude oil maintains the gains as markets await US CPI

Crude oil is claiming a recovery from a volatile run lower last week; APAC equities appear lacklustre with underwhelming Chinese economic data and many asset classes have been relatively quiet ahead of US CPI.

Source: Bloomberg

WTI crude oil steadied again today just below US$73 bbl after recovering from last week’s sell-off that saw it trade at its lowest level since late 2021.

The American Petroleum Institute (API) will release its weekly statistical bulletin later today, ahead of the monthly OPEC+ oil market report that is due to be released on Thursday

Between those reports, US CPI on Wednesday remains the focus for the broader market.

Spot gold continues to trade above US$2,025 an ounce as markets recalibrate after last week’s hike by the Fed.

Treasury yields have eased a touch so far today after adding 7 or 8 basis points across the curve yesterday. The US dollar is little moved with currency markets in slumber mode.

Wall Street finished barely moved despite lingering concerns around the debt ceiling and regional banking concerns.

APAC equity markets are mixed with Australian, Hong Kong, Korean and New Zealand indices slightly lower while Japan and mainland China have notched some gains.

China’s trade balance came in much stronger than forecast at US$ 90.2 billion for April rather than the US$71.25 billion anticipated.

The devil in the detail reveals that exports were slightly stronger, but imports slumped, raising concerns about the prospects of a recovery for the world’s second-largest economy.

Source: DailyFX

China also announced a crackdown on foreign companies that it alleges have been spying.

It is shaping up to be a quiet day on the data front, but the Australian Federal Government budget will be delivered, where a surplus is anticipated for the first time in 15 years.

WTI crude oil technical analysis

WTI overcame breakpoint resistance in the 72.25 – 72.45 area overnight and that zone might now provide support.

Further support might be at the previous lows of 66.82, 66.12, 64.36, 63.64 and 62.43.

On the topside, the nearby breakpoint at 73.93 may offer support ahead of a series of simple moving averages (SMA) in the 75.54 – 76.63 area. If those SMAs are vanquished, it could indicate that bearish momentum might be retreating.

Light crude oil daily chart

Source: TradingView

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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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