Brent crude oil, US natural gas halt their steep declines while gold rally stalls
Outlook on Brent crude oil, US natural gas and gold amid re-opening of China and clement weather forecasts.
Brent crude oil’s tumble pauses
Brent crude oil’s swift descent of close to 10% in the first couple of days of the year, due to worries about a surge in Covid-19 cases in China negatively impacting demand in the top oil importing country, is taking a breather.
In addition, OPEC crude production rose in December, due to added supply from Nigeria, despite the cartel’s agreement to cut output to support the oil price.
A fall through Wednesday’s low at $77.78 would push the $75.32 December low to the fore, a scenario which remains probable since the price of oil has been on the back foot since November.
Minor resistance can be found in the $80.00 region and further minor resistance at the $81.86 late December low.
Gold remains in six-month highs on growth concerns
Gold continues to trade at six-month highs and on Wednesday reached $1,865 per troy ounce whilst on track for the May-to-June highs at $1,869 to $1,877 as growth concerns worry investors.
This target zone represents strong resistance ahead of the April peak at $1,998 and the psychological $2,000 mark. Further up sits last year’s high at $2,070.
On Thursday a minor retracement back towards the 27 December high at $1,833 may be witnessed while the mid-June high at $1,857 caps intraday.
Further minor support is to be seen at the mid-December high and also along the November-to-January uptrend line at $1,824.
US natural gas futures trade at near one-year lows
US natural gas futures have been trading around the $4.0/MMBtu mark for the past couple of days and on Wednesday slid to $3.831, their lowest level since January 2022, as traders anticipate lower heating demand on the back of clement weather forecasts for January.
With the Freeport LNG export plant in Texas, forced to shut down in June 2022 due to a major fire, expected to re-open in the second half of January, adding further supply at a time of high inventories, US natural gas prices have fallen by over 50% since their $8.096 late November high.
After seven consecutive days of falling prices US natural gas front month futures contracts seem to be levelling out short-term above the February 2022 low at $3.875 and this week’s low at $3.831, below which the January 2022 low can be spotted at $3.670.
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