Commodities: Crude steals cautiously higher as market looks ahead to rig-count data

Digital Look Sharecast | 16 Jun, 2017 16:26 | | |

BP oil rig offshore Azerbaijan; oil & gas

Crude-oil futures stole cautiously ahead Friday as the market awaits Baker Hughes rig data this afternoon, and despite the overall bearish sentiment surround the black liquid.

At 15:43 BST, Nymex-priced West Texas Intermediate crude was up 0.34% to $44.61 a barrel. Intercontinental Exchange-traded Brent rose 0.58% to $47.19 a barrel.

Oil has long been in the grips of a global glut, with Opec output pledges seen as insufficient given US shale production. US stores data has seen whip-sawing crude prices.

Oanda senior market analyst Craig Erlam said crude was nudging ahead as the market awaited the figures from Baker Hughes at about 18:00 BST.

"Brent and WTI crude have come under significant pressure since oil producers agreed to extend cuts by another nine months in a bid to rebalance the market and bring inventories back to their five year average," said Erlam.

"Whether US output will offset these cuts, or a significant portion of them, will be seen over the next year or so but as long as we keep seeing the rig count climb, prices could remain under pressure," he added.

FXTM research analyst Lukman Otunuga assessed that market sentiment remained firmly bearish towards oil with further downside expected as the oversupply fears grant sellers the permission to attack the commodity.

"From a technical standpoint, WTI Crude is heavily bearish on the daily charts. Traders may utilize the dynamic $45 resistance to send WTI towards $43."

SwissQuote added that WTI was expected to show further decline, putting support at $43.76.

Turning to metals, on Comex, gold rose 0.2% to $1257.1 an ounce. Silver fell 0.34% to $16.66 an ounce. Copper was down 0.18% to 256.1 cents a pound.

SwissQuote said gold is consolidating within uptrend channel, placing hourly support at $1246 and stronger support at $1195.

"In the long-term, the technical structure suggests that there is a growing upside momentum. A break of $1392 is necessary to confirm it."

Otunuga held an apparently different view. "There is a risk of further downside if speculations mount over the Federal Reserve raising rates again this year," he said.

"Although risk aversion from both Brexit developments and political uncertainty in Washington could support prices, short-term bears remain in control below $1260.

"From a technical standpoint, previous support around $1260 could transform into a dynamic resistance that encourages a decline towards $1240."

On London Metals Exchange, three-month industrial metals were mixed. Aluminum fell 0.56% and copper shed 0.67%, but zinc rose 0.44% and tin gained 1.43%.

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