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Oil Slides On Day Russian Price Caps Take Effect

  • Crude oil has slumped today as Russian price caps take effect the day after OPEC+ decided it would stick to current production quotas rather than cut further, more than offsetting demand prospects from China relaxing more Covid restrictions.
  • It also came against a tougher macro backdrop with Treasury yields climbing after a beat for ISM services, which continued a painful combination for oil of domestic strength that keeps pressure on the Fed to hike aggressively but signs of weaker external demand as new export orders were slashed.
  • WTI is -3.55% at $77.14 having cleared support at $78.40 (Nov 30 low) to open $73.38 (1.00 proj of Aug 30 – Sep 28 – Nov 7 price swing).
  • Brent is -3.2% at $82.82 having cleared support at $85.99 (Nov 30 low) to open $80.81 (Nov 28 low).
  • Gold is -1.7% at $1766.54, eating into last week’s gains that saw clearance of the psychological $1800. Key resistance is seen at $1807.9 (Aug 10 high) whilst support is at $1747.4 (20-day EMA).

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