. Daily Commodity Analysis - Oil Surges 1% as Saudi, Russia Extend Cuts, Silver Nears $23

Daily Commodity Analysis – Oil Surges 1% as Saudi, Russia Extend Cuts, Silver Nears $23

Daily Commodity Analysis – Oil Surges 1% as Saudi, Russia Extend Cuts, Silver Nears $23

06 Nov 2023

Introduction:

In the world of commodities, oil prices have seen a 1% rise as major oil exporters, Saudi Arabia and Russia, reaffirm their commitment to production cuts until year-end. Meanwhile, silver is flirting with its 200-day SMA around the $23.20-25 range, showing signs of potential upward movement. In contrast, gold is declining as risk appetite grows due to expectations of a Federal Reserve pause, and copper prices experience fluctuations driven by uncertain demand, increased supply, and the impact of a weaker US dollar. Investors are also keeping a close eye on China’s economic data after lacklustre factory figures last week, given its substantial influence on global market sentiments.

Brent Crude Oil:

Oil rises by 1% as Saudi Arabia, Russia sticks to cuts.

Oil prices increased on Monday following the reiteration of their commitment by major oil exporters Saudi Arabia and Russia to continue their additional voluntary oil production reductions until the end of the year.

Oil prices made a recovery on Monday, following a roughly 6% decline in both Brent and WTI futures during the week ending November 3rd. Saudi Arabia officially announced on Sunday that it intends to maintain its extra voluntary reduction of 1 million barrels per day (bpd) in December, keeping production at approximately 9 million bpd, as confirmed by a source from the ministry of energy.

Investors are eagerly awaiting further economic data from China following the release of underwhelming factory data for October last week. China, as the world’s second-largest oil consumer, holds significant sway over market sentiments.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 85.77| Positive Crossover | Bullish
  • MA 20: 86.46| Negative Crossover | Bearish
  • MA 50: 87.50| Negative Crossover | Bearish

Simple:

  • MA 5: 86.03| Negative Crossover | Bearish
  • MA 20: 86.48| Negative Crossover | Bearish
  • MA 50: 88.22| Negative Crossover | Bearish

RSI (Relative Strength Index): 44.44 | Neutral Zone | Neutral

Stochastic Oscillator: 48.78| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 87.38 | R2: 92.46
  • S1: 85.44| S2: 81.74

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 84.48 | Take Profit: 81.74 | Stop Loss: 86.49.

SILVER:

XAG/USD flirts with 200-day SMA near $23.20-25 region.

Silver sees some buying interest before reaching the significant $23.00 mark but struggles to sustain momentum.

The technical conditions favour bullish traders and bolster the potential for continued upward movement.

Silver (XAG/USD) stages a recovery, bouncing back from the $23.10 region and making its way to the upper boundary of the daily trading range in the early part of the European session on Monday. However, bullish investors are still looking for a consistent breakthrough above the significant 200-day Simple Moving Average (SMA) before considering new positions.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 23.13 | Positive Crossover | Bullish
  • MA 20: 23.03 | Positive Crossover | Bullish
  • MA 50: 22.90 | Positive Crossover | Bullish

Simple:

  • MA 5: 23.18 | Negative Crossover | Bearish
  • MA 20: 23.03 | Positive Crossover | Bullish
  • MA 50: 23.01 | Positive Crossover | Bullish

RSI (Relative Strength Index): 54.93 | Buy Zone | Bullish

Stochastic Oscillator: 90.65| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 23.28 | R2: 24.34
  • S1: 22.53| S2: 21.60

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 23.46 | Take Profit: 24.34 | Stop Loss: 22.91.

Elsewhere In the Commodity Market.

Gold prices decline as the appetite for risk increases amid expectations of a Federal Reserve pause. Copper prices exhibited slight variations on Monday, influenced by uncertain demand, increased supply, and the effects of a weakened US dollar.

Gold down (0.25%) at 1987.09, Silver down (0.24%) at 23.15, Palladium up (0.84%) at 1126.26, Platinum down (0.05%) at 929.63, Brent Crude Oil up (1.50%) at 86.15, WTI Crude Oil up (1.65%) at 81.84 as of writing time.

Key Economic Events & Data Release Today:

(JPY) Monetary Policy Meeting Minutes at 05:20.

(GBP) Construction PMI (Oct) Forecast 46.0, Previous 45.0 at 15:00.

(CAD) Ivey PMI (Oct) Previous 53.1 at 20:30.

(GBP) BoE MPC Member Pill Speaks at 22:30.