WTI Oil Rallies As U.S. Domestic Production Declines

Key Insights

• WTI oil rallied after bullish EIA report. 
• Natural gas remained under pressure. 
• Precious metals rebounded as dollar pulled back from highs. 

WTI Oil Settled Back Above The $80 Level

WTI oil gained strong upside momentum and moved back above the $81 level. Today, traders had a chance to take a look at the EIA Weekly Petroleum Status Report. The report indicated that crude inventories increased by 0.2 million barrels from the previous week. Analysts expected that crude inventories would increase by 0.4 million barrels.

Gasoline inventories declined by 2.4 million barrels, while distillate fuel inventories grew by 2.9 million barrels.

U.S. domestic oil production declined from 12.1 million bpd to 12 million bpd, which served as a significant positive catalyst for oil markets.

Natural Gas Is Losing Ground Despite Bullish Sentiment In Commodity Markets

Natural gas moved towards the $6.50 level as traders remained focused on Hurricane Ian, which is expected to reduce demand for natural gas in the near term.

The strong rebound in global commodity markets failed to provide enough support to natural gas. The big story in Europe, where Nord Stream pipelines may be permanently destroyed after explosions due to potential corrosion, also had no impact on U.S. natural gas markets.

Gold Rebounds As Treasury Yields Pull Back From Highs

Gold moved back above the $1650 level as the U.S. dollar pulled back from multi-decade highs. Treasury yields have also moved lower as the appetite for risk increased. Currently, the yield of 10-year Treasuries is trying to settle below the 3.75% level. In case this attempt is successful, it will move towards the 3.70% level, which will be bullish for gold.

Currently, gold is trying to settle above the resistance at $1660. In case this attempt is successful, gold will move towards the next resistance level, which is located at $1675. A move above this level will push gold towards the resistance at $1690. If gold manages to settle back above $1690, it will head towards the 50 EMA at $1720.

On the support side, the nearest support level for gold is located at $1640. If gold settles below this level, it will head towards the next support at $1620. A successful test of the support at $1620 will open the way to the test of the next support at $1600.

Meanwhile, silver moved towards $18.80. Platinum managed to settle back above the $860 level, while palladium moved closer to $2150. In the near term, traders will stay focused on the dynamics of the U.S. dollar and Treasury yields, which will have a significant impact on precious metals.

Copper Tries To Settle Above $3.35

Copper rebounded to $3.35 as global commodity markets rebounded. Today’s global market mood is bullish, which provides material support to copper markets. It should be noted that the current rebound looks technical, and copper will likely need more positive catalysts for a sustainable upside move.

For a look at all of today’s economic events, check out our economic calendar.