OIL : US`s Demand Recovery
(Wed, 20 May 2020). Crude oil prices were higher on signs of increasing demand. They’re very cautious as yet, however Gold prices were also up as present economic data remain dire. Crude oil prices were higher in Wednesday’s Asia Pacific session, with hopes of higher demand enduring despite clear ongoing worries linked to demand and the coronavirus’ spread.
The June West Texas Intermediate futures contract expired at $32.50/barrel in stark and reassuring contrast to the previous month when May’s fell well below $0. Moreover, the American Petroleum Institute said on Tuesday that domestic crude inventories fell by 4.8 million barrels, to a still-remarkable 521.3 million in the week to May 15. Refinery demand rose, however, suggesting that more fuel is being produced in response to lockdown-easing programs.
The Energy Information Administration will release official stockpile data later Wednesday.
Oil - US Crude
The better tone in energy markets was not enough to mask gloom elsewhere and gold prices also rose as investors contemplated a supportive mix of weak economic data and the prospect of prolonged loose monetary policy around the world. US homebuilding fell by the most on record in April, piling more bad news on top of the likes of catastrophic unemployment gains. Japanese business confidence was also revealed to be at its lowest point for a decade.
This doesn’t look like an environment in which gold’s haven bid is set to meaningfully wane and, with likely subdued inflation data due from the Eurozone and UK later the metal may get further support.
CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices’ steep run of gains continues with prices extending their winning run into a resistance band from early March. There may be some sign that momentum is waning, with daily trading ranges narrowing again, but that might be expected after such as strong run higher. Consolidation within the trading range above would likely still be bullish, but the market is likely to remain biased upward for at least as long as the psychologically important $30 support level holds.
The prevalent uptrend offers its own support just below that at $29.51.
GFS ASIA TEAM
- just now