Crude Oil Range Bound Ahead of OPEC+ Gathering and FOMC Minutes
05 Jul 2023 06:00, GMTCrude Oil, WTI, Brent, US Dollar, FOMC, China, Hang Seng Index - Talking Points
- Crude oil prices appear to be looking for direction as markets eye OPEC+
- Currencies have been lacklustre but that may change with the FOMC minutes
- If the Fed was more hawkish than previously thought, will it impact WTI?
Crude oil has had a mixed session so far on Wednesday ahead of the start of the OPEC+ gathering that gets underway in Vienna today. The disparity in prices is explained by the US holiday on Tuesday.
The West Texas Intermediate (WTI) futures contract is heading north as it approaches US$ 71 bbl while the Brent contract has dipped below US$ 76 bbl.
The overall sluggishness of prices is despite Saudi Arabia and Russia committing to extending their production cuts earlier this week.
The gold price has eked some small gains today, trading over US$ 1,925.
APAC equities have had a tough day after China’s Caixin services PMI for June underwhelmed expectations. It came in at 53.9 rather than the 56.2 anticipated and 57.1 previously. The composite PMI was 52.5 against 55.6 prior.
Hong Kong’s Hang Seng Index (HSI) bore the brunt of the negative sentiment, trading more than 1.5% lower through the session.
Anaemic currency markets appear to be waiting for the return of US traders after a holiday there.
Later today the Fed’s FOMC minutes from the June gathering will be released. The market will be looking for clues on the outlook for the rate path given that they paused their hiking but then resumed the hawkish rhetoric in the aftermath of the conclave.
New York Fed President John Williams will also be speaking today.
The full economic calendar can be viewed here.
WTI CRUDE OIL TECHNICAL ANALYSIS
WTI crude continues to see range trading conditions with the price contained within 66.80 – 75.06 for more than 2 months. More broadly, it has traded between 63.64 and 83.53 since last November.
With this in mind, previous highs and lows might provide resistance and support respectively.
On the downside, support may lie at 67.03, 66.82, 66.80, 64.36, 63.64 or at the November 2021 low of 62.43.
On the topside, resistance could be at 72.72, 73.28, 75.06, 76.92 and 79.18 ahead of a cluster of breakpoints and prior peaks in the 82.50 – 83.50 area.
--- Written by Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @DanMcCarthyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.