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Third Weekly Decline For Crude Despite Latest Rise, Gold Breaches 50-day EMA

  • WTI has increased strongly on the day but it doesn’t prevent weekly losses after steep declines earlier in the week (and the third weekly decline in a row). The timid demand outlook continues to weigh on prices, as has the lack of regional escalation stemming from the Israel-Hamas conflict which has also helped see gold prices slump.
  • OPEC+ crude oil output rose by 180kbpd M/M in October to 42.71mbpd, amid higher output from Iraq and Iran according to the latest Platts survey. OPEC+ production among the 19 members subject to quotas was up 70k b/d M/M in Oct to 36.27m b/d, according to estimates by Argus.
  • An extension to Saudi Arabia’s 1mbpd voluntary oil production cuts is very probable, as the market would otherwise risk a very high supply surplus in the first half of next year, Commerzbank said in a note.
  • Brent crude futures aggregate open interest has continued to fall this week following a drop after the Dec23 contract expiry. ICE Brent open interest is down to the lowest since January at 2.042m yesterday from over 2.2m at the end of October.
  • WTI is +1.85% at $77.14, and being back more firmly in the week’s range doesn’t trouble technical levels with resistance at $80.20 (Oct 6 low) and support at $74.91 (Nov 8 low).
  • Brent is +1.75% at $81.42 vs resistance at $82.20 (Oct 6 low) and support at $79.20 (Nov 8 low).
  • Gold is -1.2% at $1935.5 for a sharp move considering a modest decline in the USD index. It has notably cleared support at the 50-day EMA of $1938.1 to open $1868.8 (Oct 13 low).
  • Weekly moves: WTI -4.2%, Brent -4.1%, Gold -2.9%, US nat gas -13.3%, EU TTF nat gas -3.0%.

WTI 1st future (white) and spot gold (yellow)Source: Bloomberg

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