19.09.2023: Oil extends rally despite overbought conditions. Outlook for oil, gold, RUB
Brent crude has topped the level of 95 dollars per barrel, despite claims from many analysts that its upside potential is exhausted. Oil traders continue to open long positions, paying no attention to ample warnings.
A rise in oil prices is mainly due to expectations of a substantial energy market deficit in the fourth quarter due to Saudi Arabia and Russia’s output cuts. Besides, US oil output from top shale-producing regions has been falling for the third month in a row and is on track to hit the lowest level since May.
In their forecasts, analysts remind traders of tomorrow’s meeting of the US Federal Reserve. Given some uncertainty about its outcome, they expect market participants to avoid risks. In fact, however, we are witnessing quite different moods.
From a technical point of view, the fact that the benchmark has overcome the level of 95 dollars per barrel, indicates the prevailing bullish market mood. If traders keep ignoring overbought signals, oil prices will most likely extend gains, heading for the psychological mark of 100 dollars per barrel. Nevertheless, technical analysts warn that sooner or later bulls will start locking in profits, which could lead to a major sell-off in the market.
Likewise, the yellow metal rose above 1,930 dollars per ounce. Considering that gold is often used not only as a safe-haven asset but also as an object of speculation, this behavior hints at expectations regarding tomorrow’s Fed meeting. If the US regulator does not raise the refinancing rate, it will at least signal further rate increases at the next policy meetings. After all, inflation in the United States continues to rise, thus contributing to a stronger dollar and lower gold prices. The current movement of the asset can be attributed to the fact that many instruments tend to move in the opposite direction from expectations ahead of important events.
Meanwhile, the Russian currency continues to trade at around 96 rubles per dollar. The dollar/ruble pair failed to stay firm above the 97 mark. As a result, the volume of short positions increased, and the uptrend slowed. In case of a correction, the price is likely to approach the levels of 95-94.
The ruble’s further downside potential was somewhat reduced by the Russian president’s statement. During yesterday’s meeting on the federal plan for the 2024–2026 planning period, Vladimir Putin called on the Bank of Russia and the Ministry of Finance to develop a comprehensive approach to stabilize the ruble. After that, the market came to a standstill, waiting for their remarks. If there are no comments from the central bank or Russia’s finance ministry in the near future, the ruble will most likely resume losses.
That’s all for now. We wish you profitable deals. See you on our channel with a new video in a couple of hours!
00:00 Introduction
00:20 Situation on the oil market
00:48 What does the coming day have in store for us?
01:08 Brent
01:41 Gold
02:34 USD/RUB
02:58 Putin helped the ruble
03:37 Conclusion
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