The crude oil market is holding steady, currently trading just below US$78.50 per barrel, despite slipping overnight. This decline occurred despite the news that crude stockpiles had fallen by less than expected. Other energy products, particularly gasoline, experienced notable decreases in demand.
According to data from the US Energy Information Agency (EIA), crude inventory levels fell by 708,000 barrels for the week ending July 14th, which is significantly lower than the forecast of a 2.44 million barrel decrease.
Wheat prices have continued to rise, with notable gains in recent days, due in part to Russia’s threat to take action to close Ukrainian ports for grain exports. Russia has warned that vessels entering the Black Sea will be considered to be carrying armaments.
Spot gold prices have risen slightly, reaching their highest level in 7 weeks, partly due to the weakening of the US Dollar against other currencies.
The Australian Dollar received a boost as it surpassed 68 cents, ignoring recent bearishness, after the unemployment rate in Australia dropped to 3.5% in June, which is lower than the forecasted 3.6%.
The People’s Bank of China (PBOC) decided not to cut the rate on the 1- and 5-year loan prime rate, maintaining them at 3.55% and 4.20%, respectively. There is speculation that Beijing will implement further stimulus measures to revitalize its economy, as previous efforts have not yielded positive results.
In the APAC region, equity markets are mixed with little movement, except for Japanese stocks, which are down over 1% at the time of reporting.
Wall Street futures indicate a slow start to the cash session due to mixed results reported by Tesla and Netflix.
Treasury yields have stabilized after a slight decline earlier in the week, with the benchmark 10-year bond inching above 3.75%.
Looking ahead, the market will focus on US jobs data and home sales figures.
Regarding the WTI crude oil technical analysis, the WTI contract has been experiencing range trading conditions, with some short-term volatility in recent weeks. The price has been confined between 66.80 and 77.33 for 11 weeks. Zooming out, since November of the previous year, the price has traded between 63.64 and 83.53.
Support and resistance levels to watch for include:
Downside:
- Support near 75.00 and 72.72.
- Prior lows at 67.03, 66.82, 66.80, 64.36, 63.64.
- November 2021 low at 62.43.
Upside:
- Resistance at 76.92 and 79.18.
- A cluster of breakpoints and prior peaks in the 82.50 – 83.50 area.
