Brent crude oil stays bid while wheat and natural gas lose steam
Outlook on Brent crude oil, Chicago wheat and natural gas following this weekend’s military coup in Russia.
Brent crude oil price remains bid
Brent crude oil briefly gapped higher on Monday morning as concerns about political instability in Russia following the weekend’s quickly abandoned military coup and potential supply disruptions pushed prices higher. On the daily chart the gap was quickly filled as traders once again focused on global demand amid monetary tightening. While Monday’s low at $73.60 isn’t being slipped through, further short-term upside is expected to be seen with the May-to-June resistance line and the 55-day simple moving average (SMA) at $77.12 to $77.50 remaining in sight. If overcome, the May and June highs at $78.17 to $78.52 may be reached as well. The short-term uptrend will remain in play while last week’s low at $72.28 underpins.
Chicago Wheat forms minor top
Chicago Wheat’s rally to a four-month high on worries about Midwestern dryness and political instability in Russia leading to supply issues has taken it to $7.70 before forming a minor top. The price is now trading back below its 200-day simple moving average (SMA) at $7.51 and has entered a previous support and also resistance zone seen between $7.30 to $7.16. It contains the December and January lows and March and April highs. If a daily chart close below $7.16 were to occur, a tumble back towards the $6.71 to $6.31 region may ensue. It is made up of the May to early June highs.
Natural gas prices trade close to four-month highs
Natural gas prices are running out of steam. They rallied to a $2.930 MMBtu near four-month peak on lingering concerns on whether European supply can keep up with demand. Reasons were outages in Norway, the Netherlands set to close Europe's largest gas site in October and hotter weather as the summer season arrives. With Europe’s gas storage at over 75% full, a record level for this time of year, a softening in the price of natural gas could soon unfold, though. A slip back from Monday’s $2.930 high could lead to a visit of the $2.786 May peak within days. Were Monday’s high at $2.930 to be exceeded, the psychological $3.000 mark would be targeted next.
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