. Daily Commodity Analysis - Oil Steadies, Natural Gas Pressured

Daily Commodity Analysis – Oil Steadies, Natural Gas Pressured

Daily Commodity Analysis – Oil Steadies, Natural Gas Pressured

28 May 2024

Introduction

Oil prices stabilize as OPEC+ output cuts balance interest rate concerns. WTI Oil appreciates ahead of OPEC+ discussions on extending cuts, while geopolitical tensions and Fed rate policies influence demand. Natural gas futures drop due to lower demand forecasts and oversupply. Gold and silver prices fluctuate with a weaker US Dollar and geopolitical risks, amidst anticipation of key US economic data.

Markets In Focus Today – CRUDE OIL

Oil steadies as OPEC+ restraint balances interest rate concerns.

WTI Oil price appreciates ahead of OPEC+ meeting, where the group will discuss extending voluntary output cuts.An Israeli strike in the Gazan city of Rafah killed 45 people, sustaining geopolitical risks that favor higher crude Oil prices.Fed officials suggested maintaining higher rates that are negatively impacting the US economic outlook and reducing Oil demand.West Texas Intermediate (WTI) Oil prices inch higher ahead of the Organization of the Petroleum Exporting Countries and allies including Russia (OPEC+) meeting scheduled for June 2, where group producers will discuss extending voluntary output cuts of 2.2 million barrels per day into the second half of 2024. WTI crude Oil prices trade around $78.70 per barrel during the Asian hours on Tuesday. Global oil prices steadied on Tuesday as the prospect of OPEC+ maintaining oil supply curbs at its June 2 meeting and hopes of strong U.S. summer fuel demand balanced concern about higher-for-longer U.S. interest rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 78.4822 | Positive Crossover | Bullish
  • MA 20 : 79.1592 | Negative Crossover | Bearish
  • MA 50 : 80.0524 | Negative Crossover | Bearish

Simple :

  • MA 10 : 78.5287 | Positive Crossover | Bullish
  • MA 20 : 78.6479 | Positive Crossover | Bullish
  • MA 50 : 81.6853 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 46.3570 | Neutral Zone | Neutral

Stochastic   Oscillator : 99.71 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 85.9330 R2 : 87.5706
  • S1 : 80.6316 S2 : 78.9940

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell: 79.93 | Take Profit : 77.64 | Stop Loss : 81.22

NATURAL GAS

Pressured Last Week by Lower Demand Forecasts.

U.S. natural gas futures dropped by about 5% on Friday, hitting a one-week low due to forecasts for lower demand in the coming weeks and an ongoing oversupply. LSEG noted that gas output in the Lower 48 U.S. states averaged 97.5 billion cubic feet per day (bcfd) so far in May, down from 98.2 bcfd in April and significantly below the monthly record of 105.5 bcfd in December 2023.Overall, U.S. gas production remains down about 8% in 2024, as energy firms delayed well completions and reduced drilling activities after prices hit 3-1/2-year lows earlier this year.Given the current oversupply and forecasts for lower demand, the outlook for U.S. natural gas futures remains volatile in the short term. Prices may continue to face downward pressure unless there are significant shifts in production or unexpected spikes in demand.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.4824 | Positive Crossover | Bullish
  • MA 20 : 2.3295 | Positive Crossover | Bullish
  • MA 50 : 2.1088 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2.5333 | Negative Crossover | Bearish
  • MA 20 : 2.2888 | Positive Crossover | Bullish
  • MA 50 : 1.9492 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.4515 | Buy Zone | Bullish

Stochastic   Oscillator : 3.84 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.8667 R2 : 1.9349
  • S1 : 1.6459 S2 : 1.5777

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 2.62 | Take Profit : 2.91 | Stop Loss : 2.45

GOLD

Gold price rebounds on weaker US Dollar, investors await US key data.

Gold price gains momentum in Tuesday’s Asian session. The weaker USD and ongoing Middle East geopolitical tensions support the precious metal. Traders will monitor the US CB Consumer Confidence and the speeches from the Fed’s Kashkari, Daly and Cook on Tuesday. Gold price (XAU/USD) edges higher on Tuesday after bouncing off two-week lows of $2,325. The uptick of yellow metal is bolstered by the softer US Dollar (USD) and safe-haven flows amid the ongoing geopolitical tensions in the Middle East. On the other hand, higher short-term Treasury yields following hawkish Fed minutes and stronger US economic data are likely to support the Greenback in the near term. Traders might prefer to wait on the sidelines ahead of the key US inflation data this week.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2358.5115 | Negative Crossover | Bearish
  • MA 20 : 2353.0618 | Negative Crossover | Bearish
  • MA 50 : 2304.0806 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2375.5450 | Negative Crossover | Bearish
  • MA 20 : 2351.4001 | Negative Crossover | Bearish
  • MA 50 : 2318.0917 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 49.5080 | Buy Zone | Bullish

Stochastic   Oscillator : 36.56 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 2392.8718 R2 : 2440.8082
  • S1 : 2237.6882 S2 : 2189.7518

Overall Sentiment : Neutral Market Direction : Neutral

Trade Suggestion : Limit Sell : 2371.42 | Take Profit : 2329.02 | Stop Loss : 2403.22

SILVER

XAG/USD moves below $31.50 due to market caution.

Silver price edges lower as investors adopt caution ahead of looming US PCE Inflation.The hawkish sentiment surrounding the Fed’s stance on maintaining higher interest rates weakens non-yielding assets like Silver.The escalated situation in the Middle East could provide some support for safe-haven assets like Silver.Silver prices edged lower to near $31.40 per troy ounce during the early European session on Tuesday. The grey metal is struggling due to market caution ahead of the Federal Reserve’s preferred measure of inflation, the Core Personal Consumption Expenditures (PCE) Price Index data, which is due on Friday. This data is crucial for assessing future US monetary policy. The US Core PCE is expected to show an increase of 0.3% month-over-month and 2.8% year-over-year in April. Non-yielding assets like Silver are under pressure due to the hawkish sentiment surrounding the US Federal Reserve (Fed), which is committed to maintaining higher interest rates for an extended period. Last week, Fed officials tempered expectations for rate cuts, cautioning that the central bank still needs more evidence that inflation will eventually decline to its 2% annual target.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 31.08 | Positive Crossover | Bullish
  • MA 20 : 30.87 | Positive Crossover | Bullish
  • MA 50 : 30.00 | Positive Crossover | Bullish

Simple :

  • MA 10 : 30.79 | Positive Crossover | Bullish
  • MA 20 : 31.05 | Positive Crossover | Bullish
  • MA 50 : 29.83 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 60.07 | Buy Zone | Bullish

Stochastic   Oscillator : 76.22 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 31.83 R2 : 32.52
  • S1 : 30.53 S2 : 29.08

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 30.53 | Take Profit : 31.86 | Stop Loss : 29.73

Elsewhere In The Commodity Market

Gold down (0.32%) at 2343.52, Silver down (0.55%) at 31.47, Palladium down (0.89%) at 981.31, Platinum down (0.34%) at 1048.78, Brent Crude Oil up (0.18%) at 82.92, WTI Crude Oil up (0.37%) at 78.80 as of writing time.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Apr) Forecast –0.3%, Previous –0.4% at 07:00. (USD) CB Consumer Confidence (May) Forecast 96.0, Previous 97.0 at 19:30.