WTI Oil Drops 3.5% Amid Demand Worries

Key Insights

• Oil markets moved lower as traders focused on the potential demand weakness. 
• Natural gas markets remain under huge pressure due to warm weather. 
• Gold tested multi-month highs despite stronger dollar. 

WTI Oil Falls As Traders Worry That Demand Will Be Weak In China

WTI oil pulled back towards $77.50 as traders focused on recession risks and potential weakness of demand in China. The strong rebound of the U.S. dollar served as an additional negative catalyst for oil markets.

The nearest significant support level for WTI oil is located at the $77 level. A move below this level will open the way to the test of the next material support level, which is located at $75.50.

Natural Gas Retreats As Traders Focus On Warm Weather

Natural gas prices remain under strong pressure as warm weather crushes demand for natural gas. The weather is expected to be warm in the upcoming days, and it remains to be seen whether natural gas prices will get any support.

Currently, natural gas is trying to settle below the $4.00 level. In case this attempt is successful, natural gas will move towards the next support level at $3.80.

Gold Tested Multi-Month Highs At $1850

Gold tested multi-month highs at $1850 but lost momentum and pulled back towards the $1835 level. The pullback in Treasury yields served as the key bullish catalyst for gold markets today. In addition, it looks that gold received a portion of the rising demand for safe-haven assets. Positive catalysts were somewhat offset by the strong dollar, which put some pressure on the price of gold today.

Silver and platinum have also managed to gain some ground today. Silver tested the $24.50 level but lost momentum and pulled back towards $24.00. Platinum made an attempt to settle above the $1100 level. Meanwhile, palladium  found itself under strong pressure and moved towards the $1700 level.

Copper Pulls Back Towards The Low End Of The Current Trading Range

Worries about the near-term economic activity in China and strong dollar put pressure on copper markets. The price of copper moved below the $3.80 level and is heading towards the nearest support level at $3.75. A move below this level may trigger a sell-off as copper has been trading in the $3.75 – $3.95 range for a month.

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