Brent crude oil, US natural gas halt their steep declines while gold rally stalls

​​​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.