FX.co ★ 04.08.2022: Oil slides on OPEC+’s tiny boost. Outlook for oil, gold, RUB

04.08.2022: Oil slides on OPEC+’s tiny boost. Outlook for oil, gold, RUB

On Wednesday, OPEC and its allies agreed to a tiny increase in output. Recall that during his trip to Saudi Arabia, US President Joe Biden called on the world's oil-exporting countries to pump more oil to tackle rising energy prices. As a result, despite such a slight increase in production, oil prices still edged lower.

Notably, members of oil producers' group OPEC+ again marked limited spare capacity to increase output and agreed that they would produce an additional 100,000 barrels a day. Thus, the latest production output increase is at a much slower pace than in recent months.

Besides, yesterday it became known that US crude oil inventories increased by about 4.5 million barrels against market expectations of a contraction. This signals easing oil demand in the country. According to the Energy Information Administration, US households now use fewer vehicles than at the height of the pandemic, in the summer of 2020.

From a technical point of view, Brent crude oil futures gained stronger downside momentum after the price fixed below $98 per barrel. In fact, this indicated a continued downtrend initiated in mid-June. A confirming signal will be generated after the price breaks through 94.50, the local low posted on July 14. In this case, Brent crude will be able to overcome the area of 96/100, and sellers will have every chance of taking the lead.

Meanwhile, gold is still trading around its monthly high. Ahead of US jobs data to be released tomorrow, the yellow metal is in demand among traders. The employment report is expected to be weak, which will allow the US Federal Reserve to slow down the pace of interest rate hikes. Although several members of the Federal Open Market Committee have recently announced their firm intention to continue the aggressive policy tightening in an attempt to rein in high inflation.

During a short-term pullback, gold futures retreated from the resistance level of 1,780 and slid to the 1,750 mark, where the volume of short positions decreased. As a result, the quote rallied again. A strong buy signal will come after the price consolidates above the level of 1,780 on the four-hour chart. Until then, the metal is likely to trade sideways in a 30-pip range.

As for the Russian currency, yesterday’s trade was subdued except for a local surge in activity at the opening of the session, after which range-bound trading resumed.

In this situation, it is risky to enter the market due to uncertainty. Thus, it is worth focusing on the 61.50 mark in case of a rally towards the 62.65-65 area, and the level of 58.50 if the price resumes a downtrend.


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*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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