Oil surges on lower omicron concerns
Oil prices rose overnight as omicron concerns continued to fade, and US API Crude Inventories showed a surprise draw of 3.1 million barrels. Assuming momentum remains positive in global markets, a fall in official US Crude Inventories (-1.7 mio exp), will probably be an excuse for oil prices to rally once again. Base metals are also rallying in Asia today, as is natural gas, ostensibly on expectations of much higher infrastructure spending in 2022. If that is so, then oil prices have also found another reason to be bullish in 2022.
Brent crude rose by 2.0% to USD 75.10 overnight where it remains in Asian trading. WTI leapt 2.45% higher to USD 71.70 a barrel, where it remains in Asia. Both contracts have recovered above their respective 100-day moving averages with initial resistance at USD 76.00 and WTI USD 73.00 respectively. I continue to believe that the lows of last week will be the lows for possibly all of next year.
Gold creeps higher
The wave of omicron-inspired growth optimism sweeping financial markets overnight appears to be tempting a few gold bulls back into the market in search of a bargain. Gold rose 0.30% to USD 1784.00 an ounce overnight, adding another 0.35% to USD 1790.00 an ounce in Asia today. Gold could well continue staging a modest recovery this week, as long as sentiment remains positive.
In the bigger picture, gold still looks confined to a USD 1770.00 to USD 1800.00 range this week, unable to sustain momentum above or below those levels. The 50,100 and 200-day moving averages (DMAs), clustered between USD 1790.60 and USD 1795.00 provides immediate resistance, followed by USD 1800.00, and then USD 1810.00. Support lies at USD 1770.00 and USD 1760.00.