FX.co ★ 28.11.2022: Oil prices slump. Outlook for oil, gold, RUB

The number of coronavirus cases in China continues to rise. The authorities began to introduce lockdown measures, which even led to street protests in a number of major cities. The restrictions in turn will inevitably cause a decline in oil consumption in China, the world’s biggest oil consumer. Against this background, oil prices headed for the level of $80 per barrel.

If things remain unchanged, oil prices may well edge even lower. The market situation depends entirely on the further actions of the Chinese government. The quotes will quickly return to the $90 mark only if China eases some of its strict measures aimed at beating the virus.

In the meantime, Brent crude oil futures’ downside momentum accelerated, thus enabling the asset to overcome the variable support level of 82. If the price fixes below this mark, the volume of short positions will increase. In this case, the downtrend initiated in May will continue.

Gold has been standing still around $1,750 per ounce since the middle of last week. However, it has every chance of moving towards $1,800 per ounce this week. The yellow metal may well gain upside momentum amid preliminary data on inflation in the euro area to be released on Wednesday. Until then, the situation in the gold market is unlikely to change fundamentally.

Speaking of the ruble, things remain unchanged. Lately, the asset has been trading in the range of 60 to 61 rubles per dollar, while moving closer to 59 rubles per dollar in after-hour trade. All this stems from a European Union ban on Russian oil supplies that will come into effect soon, as well as Western countries’ intention to introduce a price cap on Russian energy. Judging by what is happening during after-hour trading sessions, investors consider these measures to be far from effective. On the contrary, they assume all this will only aggravate the situation with energy supplies and cause significant harm to the European economy, whereas Russia is more likely to benefit from a possible surge in energy prices. However, the dynamics of the market will hardly change until Monday when the EU ban comes into force. However, the dynamics of the market will hardly change until Monday when the EU ban comes into force.