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Trends & Analysis
News

Gold price tests a multi-month low on a stronger USD

News

Micron shares slide despite upbeat results

News

Will gold hold or fold?

News

Costco shares slide despite earnings beat

News

Crude oil becomes volatile as Russia relaxes ban

News

Where could the bulls save the S&P 500?


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Asset Watch

Will crude continue its celebration?

Thursday, September 7, 2023

With recession fears morphing into soft-landing optimism, crude oil has been a major beneficiary of the sentiment shift. And despite near-record demand, Saudi Arabia and Russia poured gasoline on the fire by announcing output cut extensions on Sep. 5. The former wrote:
“This voluntary cut decision will be reviewed monthly to consider deepening the cut or increasing production,” to ensure “stability and balance of oil markets.”
Because of this, Saudi Arabia’s output is expected to remain near nine million barrels a day for the next six months (the lowest level in many years), but will the bulls continue to be rewarded during the fall and winter?

If so, the technicals hold important clues about crude’s future direction. For example, a weekly breakout recently occurred, with black gold eclipsing resistance from its October 2021, April 2023 and August 2023 highs.

 

Crude’s 10-week moving average also ended the pullbacks over the last two weeks. The level is noteworthy because the 10-week MA held as higher highs materialised during the early 2022 run.

 

After a breakdown occurred in April 2022, five of the six intraweek declines below the 10-week MA were bought and crude closed above the technical level. If the 10-week MA holds, the outlook should be viewed as bullish.

 

So, with next-level resistance at the October/November 2022 highs near $93.50, is it safe to run with the bulls, or will the bears gain the upper hand before the end of 2023?


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