Brent crude oil and NY cocoa rally on tightening supply while gold remains subdued
Outlook on Brent, gold and cocoa as sentiment gradually improves.
Brent crude oil recovery likely has further to go
The price of Brent crude oil has risen by over 5% this week amid a dispute involving Kurdish authorities which halted around 400,000 barrels a day of oil exports from Turkey and as API data showed that US crude oil inventories unexpectedly declined by 6.1 million barrels last week, compared to an expected 180,000 barrel rise.
The Brent crude oil chart remains bullish on the outlook for top crude importer China which, according to a forecast by the China National Petroleum Corp, is expected to raise its oil imports by 6.2% in 2023 to 540 million tonnes.
The February low at $79.04 is now within reach, together with the minor psychological $80 mark. The area between the two levels may well act as short-term resistance, though. Further up meanders the 55-day simple moving average (SMA) at $82.29.
Minor support below Thursday’s $77.14 high comes in around the $75.32 December low and further down at Monday’s $73.71 high.
Gold gives back some of its recent gains as market sentiment improves
Gold’s slip from late last week’s $2,003 per troy ounce high, made slightly below its one-year high at $2,009, is still pointing towards last week’s low at $1,935 as sentiment gingerly improves.
German GfK consumer confidence came in as expected at -29.5 for April versus a downwardly revised -30.6.
Were Monday’s trough at $1,945 to give way, Wednesday's low at $1,935 would be eyed, a fall through which would target the 3 March high at $1,914.
Immediate downside pressure should be maintained while the precious metal price stays below Monday’s high at $1,978. Above this level sits the key $2,003 to $2,009 resistance zone and much further up the all-time March 2022 high at $2,070.
NY cocoa futures trade in three-year highs
NY cocoa futures rose to levels last traded in February 2020, hit by tight supplies in top grower Ivory Coast, and have so far come close to the $2,900 per metric ton level, above which sits the February 2020 peak at $2,933.
The price of cocoa has risen by over 30% from its October 2022 low but short-term is starting to lose upside momentum, having nearly seen eight consecutive higher daily closes since mid-March.
The cocoa price may thus soon retrace back to the $2,855 early March high which should act as support. Further support can be spotted at the $2,810 late February high.
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