Brent crude oil and natural gas prices rise while wheat prices drop like a stone
Outlook on Brent crude oil, Chicago wheat and natural gas amid weakening manufacturing activity in major economies.
Brent crude oil prices continue to rise
Brent crude oil is still grappling with the 55-day simple moving average (SMA) at $75.97 per barrel for the third day in a row as Saudi Arabia earlier this week announced that its voluntary output cut of 1 million barrels per day would last a month longer, until the end of August. Weakening manufacturing activity in major economies is putting pressure on the oil price, though, as did this morning’s Caixin China services PMI which fell to a five-month low.
Only a rise above Monday’s $76.56 high could lead to the late June high and the May-to-July resistance line at $77.20 to $77.24 being retested. If overcome, the May and June highs at $78.17 to $78.52 may be reached as well. Minor support can be found around the late June high at $75.07. The short-term uptrend will remain in play while last week’s low at $72.28 underpins.
Chicago Wheat prices fall off a cliff
Chicago Wheat’s rally to a four-month high at $7.70 in June on worries about Midwestern dryness and political instability in Russia has been followed by just as steep a decline. The reason for this slide is improving weather in the US. The wheat price is now trading back below its 55-day simple moving average (SMA) at $6.53 and nears the $6.34 mid-June low, a fall through which looks imminent.
Further downside targets are the $6.31 late May high, the $6.20 early June low and the psychological $6.00 region. Resistance above the $6.56 early June high can be spotted at the $6.71 May peak.
Natural gas prices consolidate around the $2.75 mark
Natural gas price rises are running out of steam. The recent decline from the $2.930 MMBtu near four-month late June high has so far taken it to last week’s low at $2.617 as Norway hopes to soon ramp up production. Since last week natural gas has been trading in a low volatility sideways trading range above its one-month tentative uptrend line at $2.686. Immediate resistance sits between the May and last Friday’s highs at $2.786 to $2.824 and support below the support line at Tuesday’s $2.661 low. Below it lies last week’s low at $2.617.
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