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Oil Surges As Disconnect With Equities Grows

COMMODITIES
  • Crude oil prices have surged further today for an extremely strong week that has been dominated by the OPEC+ decision to cut 2mbpd from its output starting November and potential further cuts from Russian production. There are fewer obvious factors for today’s further rise, although a lack of US action could be at play, with oil increasingly seeing a disconnect with equities.
  • WTI is +4.8% at $92.64, having cleared multiple resistance levels, the latest being $92.26 (Aug 30 high), opening key resistance at $96.82.
  • Brent is +3.7% at $97.9 having cleared two resistance levels to open key resistance at $101.88 (Jul 29 high).
  • Gold is -0.8% at $1698.86 as it slips on USD strength & higher yields following lower than expected US unemployment keeping the pressure on the Fed to hike aggressively. It earlier cleared support at $1695.2 (former trendline resistance) to open $1659.7 (Oct 3 low).
  • Weekly moves: WTI +16%, Brent +11%, Gold +2.3%, US nat gas 0%, EU nat gas -17%

Opening disconnect between oil and equitiesSource: Bloomberg

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