. Daily Commodity Analysis - WTI Crude Oil Rises Amid Middle East Tensions

Daily Commodity Analysis – WTI Crude Oil Rises Amid Middle East Tensions

Daily Commodity Analysis – WTI Crude Oil Rises Amid Middle East Tensions

07 May 2024

Introduction

WTI crude oil is trading around $78.50, buoyed by positive sentiment following Israel’s strike on Rafah city, which raises concerns over supply risks in the Middle East. Amid escalating tensions, Amos Hochstein, energy adviser to President Biden, confirms ample US oil supply in the SPR. Meanwhile, US natural gas futures rebound on Freeport exports and rising demand, while gold prices lose momentum amidst renewed USD demand but may find support from expectations of Fed rate cuts. Silver trims gains as weak US data affects economic outlook.

Markets In Focus Today – CRUDE OIL

WTI trades around $78.50 with a positive sentiment after Israel’s strike on Rafah city.

WTI price could appreciate due to fear over supply risk amid escalated tension in the Middle East.Amos Hochstein, the energy adviser to President Biden, affirmed that the US has a substantial supply of Oil in the SPR.West Texas Intermediate (WTI) crude Oil price hovers around $78.50 per barrel during the Asian trading hours on Tuesday. The Oil prices experienced a slight increase following Israel’s strike on Rafah in Gaza. Meanwhile negotiations for a ceasefire continued without resolving. According to Reuters, Israeli forces targeted Rafah on Gaza’s southern edge through air and ground attacks, which has provided refuge for over 1 million displaced Palestinians.On Monday, Hamas accepted a ceasefire proposal from mediators, but Israel rejected the terms, stating they did not meet its demands. The prevailing conflict in the Middle East has contributed to concerns about potential disruptions in crude Oil supplies from the region, thereby supporting Oil prices.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 80.2757 | Negative Crossover | Bearish
  • MA 20 : 81.4807 | Negative Crossover | Bearish
  • MA 50 : 81.2657 | Negative Crossover | Bearish

Simple :

  • MA 10 : 80.7880 | Negative Crossover | Bearish
  • MA 20 : 82.5033 | Negative Crossover | Bearish
  • MA 50 : 81.8676 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 35.5583 | Sell Zone | Bearish

Stochastic   Oscillator : 74.71 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 79.15 | Take Profit : 77.34 | Stop Loss : 80.62

NATURAL GAS

US natural gas futures rebound on Freeport exports, demand increases.

US natural gas markets have recently experienced a notable uptick, with front-month futures rebounding to nearly three-month highs. This positive momentum comes as recent developments bolster the outlook for summer export demand, leading natural gas futures to mark a third consecutive daily gain. While broader economic conditions and company-specific strategies play a role in shaping the natural gas market, companies like APA are adjusting their approaches in response to market dynamics. Despite a decrease in output during the first quarter, APA plans to increase investment in upstream oil and gas to $2.7 billion for the remainder of the year, reflecting a cautiously optimistic outlook. However, European gas storages are currently at 63.25% capacity, experiencing net inflows as the peak demand season winds down, which may restrain significant upward movements for now.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.8828 | Positive Crossover | Bullish
  • MA 20 : 1.8255 | Positive Crossover | Bullish
  • MA 50 : 1.8377 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.8473 | Positive Crossover | Bullish
  • MA 20 : 1.7911 | Positive Crossover | Bullish
  • MA 50 : 1.7585 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.3894 | Buy Zone | Bullish

Stochastic   Oscillator : 87.9635 | Buy Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 2.06 | Take Profit : 2.29 | Stop Loss : 1.94

GOLD

Gold price loses its recovery momentum amid the renewed US Dollar demand.

Gold price trades in negative territory on Tuesday amid the renewed USD demand. Gold price (XAU/USD) loses momentum on Tuesday. The downtick of the yellow metal is supported by the renewed US Dollar (USD) demand. However, the recent US Nonfarm Payrolls (NFP) data has boosted bets that the Federal Reserve (Fed) would cut interest rates later this year. The expectation of an easing cycle might lift the gold price as it makes gold a cheaper option for foreign buyers to purchase. Furthermore, strong central bank purchases and demand from Asian markets remain to support the precious metal in the near term. On the other hand, the signs of ongoing political tensions in the Middle East might boost the safe-haven flows and benefit the gold price. Fed Bank of Minneapolis President, Neel Kashkari, is scheduled to speak later on Tuesday. The hawkish tone from the Fed officials might support the USD and weigh on the USD-denominated gold.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2318.3076 | Negative Crossover | Bearish
  • MA 20 : 2314.5388 | Negative Crossover | Bearish
  • MA 50 : 2254.1379 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2316.5870 | Negative Crossover | Bearish
  • MA 20 : 2337.8129 | Negative Crossover | Bearish
  • MA 50 : 2249.5163 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.2539 | Buy Zone | Bullish

Stochastic   Oscillator : 25.1511 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 2321.98 | Take Profit : 2308.25 | Stop Loss : 2329.25

SILVER

XAG/USD trims previous day gains on Tuesday .

The price of silver increased to $27.48 as  weak US data falters US economic strength.The Fed lowering interest rates starting in September has been factored in by traders.Bond yields on the decline make silver more appealing. Tuesday’s European session saw a prolonged rally in the silver price (XAG/USD) to $27.20. The dismal US labour market and Services PMI, which create doubts about the health of the economy and fuel anticipation that the Federal Reserve (Fed) would lower interest rates at its September meeting, are used by the white metal to its advantage.The US Nonfarm Payrolls (NFP) report showed that fewer jobs were added in April than the consensus and the prior reading. The Unemployment Rate rose to 3.9%. Also, wage growth softened sharply. Poor US NFP report indicated deepening consequences of higher interest rates by the Fed. Also, weak Services PMI strengthened expectations for Fed rate cuts in September.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 27.00 | Positive Crossover | Bullish
  • MA 20 : 26.94 | Positive Crossover | Bullish
  • MA 50 : 27.08 | Positive Crossover | Bullish

Simple :

  • MA 10 : 27.00 | Positive Crossover | Bullish
  • MA 20 : 26.95 | Positive Crossover | Bullish
  • MA 50 : 27.09 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 55.1 | Buy Zone | Bullish

Stochastic   Oscillator : 93.57 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 27.47 R2 : 28.69
  • S1 : 26.73 S2 : 25.98

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 26.90 | Take Profit : 27.63 | Stop Loss : 26.44

Elsewhere In The Commodity Market

Gold down (0.44%) at 2315.49, Silver down (0.74%) at 27.22, Palladium down (0.9%) at 969.73, Platinum up (0.26%) at 954.47, Brent Crude Oil up (0.06%) at 83.59, WTI Crude Oil up (0.14%) at 78.72 as of writing time.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) Forecast –0.2%, Previous 0.2% at 07:00. (AUD) RBA Interest Rate Decision (May) Forecast 4.35%, Previous 4.35% at 10:00. (AUD) RBA Rate Statement at 11:00. (GBP) Construction PMI (Apr) Forecast 50.4, Previous 50.2 at 14:00. (EUR) Retail Sales (MoM) (Mar) Forecast 0.6%, Previous –0.5% at 14:30. (CAD) Ivey PMI (Apr) Forecast 58.1, Previous 57.5 at 19:30.