Brent crude oil snaps winning streak

Oil – Brent Crude futures, which on Wednesday nearly touched the 200-day simple moving average (SMA) at 81.79 amid the prospect of a prolonged Israeli military campaign in Gaza and Iran’s increasing involvement in the conflict as well as US rate cut expectations boosting global growth and energy demand outlooks, dropped back towards the breached October-to-December downtrend line at 79.24.

The fall in the oil price was triggered by major shipping firms returning to the Red Sea route following the formation of a US-led maritime task force which is to protect commercial vessels in the area and as industry data showed that US crude inventories jumped by 1.84 million barrels last week, the biggest weekly gain in five weeks.

Into year-end this week’s high, together with the 200- and 55-day SMAs, at 81.79 to 82.10 are expected to cap the upside while Tuesday’s low at 78.39 may well hold the downside.

Gold trades in three-week highs

Spot Spot Gold’s advance from its mid-December $1,974 per troy ounce low has reached the 2020, 2022 and May 2023 highs at $2,070 to $2,082 while gunning for the minor psychological $2,100 mark as the US dollar continues to depreciate. Further up sits the early December $2,121 all-time record high.

Potential slips may find support around Friday’s $2,070 high and below it between last Thursday’s $2,055 high and the mid-December high at $2,048.
Source: IG Bank