WTI Oil Rebounds On China Demand Hopes

Key Insights

• WTI oil gained upside momentum as traders shrugged off recession fears and focused on the potential rebound of oil demand in China. 
• Natural gas markets suffered a sell-off as weather forecasts pointed to a warmer end of 2022.
• Palladium retreated on demand worries. 

WTI Oil Settled Back Above $75

WTI oil  moved back above the $75 level and made an attempt to settle above $76 as traders bet that China’s demand will increase as the country continued to relax its COVID-19 restrictions.

The nearest resistance level for WTI oil is located at $76.30. In case WTI oil climbs back above this level, it will move towards the next resistance at $77.50. A successful test of the resistance at $77.50 will push WTI oil towards the resistance at $78.40.

On the support side, the nearest support level for WTI oil is located at $75.30. If WTI oil declines below this level, it will move towards the next support at $73.65. A successful test of the support at $73.65 will push WTI oil towards the support at $72.90.

Natural Gas Tests The $6.00 Level

Natural gas retreated towards the $6.00 level as traders focused on weather forecasts for the end of the year, which indicated that weather would be warmer than usual.

In case natural gas manages to settle below the $6.00 level, it will move towards the next support level, which is located at $5.75. It should be noted that natural gas managed to get out of the recent trading range so it has a good chance to develop additional downside momentum.

Gold Pulls Back As Treasury Yields Rise

Gold  failed to settle above the $1800 level and pulled back towards the support at $1785 as Treasury yields moved higher. The pullback of the U.S. dollar failed to provide enough support to gold markets.

Other precious metals have also found themselves under pressure in today’s trading session. Silver pulled back towards the $23.00 level. Platinum moved below $23.00, while palladium tested new lows near $1650.

Copper Is Mostly Flat As Traders Wait For Additional Catalysts

Copper tried to climb above the $3.80 level but lost momentum and declined towards the 20 EMA at $3.77. Copper bulls hope that China’s reopening will provide sufficient support to the price of copper. At the same time, it remains to be seen whether traders are ready for big moves at the end of a very turbulent year.

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