Crude oil is on the rise again

Morning Update

Crude oil is on the rise towards the $108.00 resistance level on Monday, as tensions towards the King of Saudi Arabia push oil prices higher, and the bombardment in Ukraine continues with no end in sight.

Basically, WTI oil moved higher is due to the war between Saudi Arabia and Yemen, which seems to be flown under the radar lately. Yemen Houthis fired missiles at energy and water facilities, which of course jolted oil prices higher.

In Ukraine, the Russian defence minister called on Ukrainian ‘nationalists’ to lay down their weapons (giving them to March 21 to do so) in Mariupol. Ukraine rejected their demand. Hence the war fight goes on.

Additionally, oil prices are also moving higher on reports that European leaders are considering a Russian oil embargo this week. It is not clear where they would get their oil imports from at this stage.

So far, other star performers recently, like gold and nickel are flatlining. Gold has a huge week ahead in terms of whether we see the yellow metal crack the $1,900 support zone of it returns to $2,060 and ultimately explodes higher.

For my money, if we see the $1,900 support level break then we could see gold return to the scene of the initial breakout spot from last month, which was $1,850. This is what the daily chart strongly suggests.

In terms of FX, it’s been a very tepid start to the week. The EUR, GBP, JPY pair are largely flatlining. The news that the city of Shenzhen is coming out of lockdown looks to have propped up risk sentiment.

Bitcoin, however, has been in the doldrums, and is falling back towards the $40,000 level after failing to move past its 100-day MA over the weekend. The BTC/USD pair is now testing its 50-day MA.

Later today, US President Biden, France’s President Macron, Germany’s Scholz, Italy’s Draghi, and UK Prime minister Johnson will have a call to further discuss the Russian plan. Later this week, President Biden will travel to Brussels to meet with NATO leaders before heading to Poland to meet with Poland’s Duda.