Mar 27, 2018 – Commodity Weekly: Crude testing January highs – the last resistance
Crude oil testing January highs as well as the revival of gold rally after the FOMC were supporting commodities last week. As energy sector and precious metals pulled the market to the upside, the agricultural contracts and industrial metals were suffering losses from rising fears that the escalating trade war could hamper global growth.
While speculative net long reached 1.06 million lots and for both WTI and Brent are speculators positioned well above 5 year average or even 5 year range, the crude prices are testing the January highs. Behind the move are is the increasing Middle east tension, mainly the threat of US reintroducing sanctions against Iran in May. Rumours that behind the scenes talks between US and China could prevent a looming trade war and the OPEC members like Saudi Arabia and Iraq with Russian reiterated their goal to extend production cut agreement also helped the rally. However many drew attention to the significant opposition that’s building inside the cartel pointing to the rising US shale production due to higher prices.
New oil contract – Shanghai Crude oil – was introduced on Monday and in the first 24 hours of trading it made up 5% of global market while Brent’s share was 23% while most of Europe on vacation already and 72% of WTI. In dollar terms INE is trading btw Brent and WTI.
Sugar lost support and dropped to the lows of 2017, top of support zone, on ample supply and positive weather conditions. Long term however the production can drop further on low prices and this may eventualy create a supply shortage next year.
Good Luck and remember to watch your risk and be consistent
Mr. Tech Man
DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016-2018.
Contact: landoftradingATgmailDOTcom, Blog: landoftrading.blogspot.com