A decline in US factory production indicates that oil demand will immediately decrease. Against this background, oil prices have extended losses, coming close to the level of $70 per barrel.
Thus, the asset is deep in oversold territory, and a local rebound is long overdue. Moreover, there are some fundamental factors that could act as a driving force.
According to Bloomberg, China’s Unipec has bought 2 million barrels of the North Sea's Johan Sverdrup crude, the first purchase to Asia in three months. This is a sign of strong demand from the top crude importer. Nevertheless, oil traders remain cautious ahead of the Fed's monetary policy decision this week.
Brent crude oil futures kicked off the new trading week on a down note. The quote hit a new local low and extended its slide, thus ignoring an oversold signal. Now sellers need to overcome the psychological level of $70 per barrel. In theory, this mark may serve as an obstacle to the asset’s continued decline. However, if downside momentum remains strong and the quote fixes below the key level, further losses cannot be ruled out.
Most likely, the news that Swiss bank UBS has agreed to buy its rival Credit Suisse will somewhat ease fears of a broader banking crisis. In this case, oil prices will have a chance of paring some losses. However, their bullish run is expected to be short-lived. After all, turmoil in the banking sector could hurt the economy and cause a recession, which in turn will reduce demand for fuel.
Meanwhile, the dynamics of gold indicate that investors do not believe that the financial system is able to withstand such shocks. They continue to flee to the yellow metal, pushing its value up to the level of $2,000 per ounce. According to short time frames, the asset is overbought. Nevertheless, if the price consolidates above the 2,000 mark, it will most likely ignore technical signals and extend gains.
Fears that the crisis is far from over and other banks are also at risk are expected to drive the yellow metal further up. Thus, gold prices are likely to rise above $2,000 per ounce in the near future.
Now let’s move on to the ruble. Although the Bank of Russia left interest rates unchanged, the Russian currency fell, enabling the dollar to rise above 77 rubles.
This can be attributed to Russian Central Bank Governor Elvira Nabiullina’s speech at a press conference. The head of the Bank of Russia hinted at a possible reduction in the key interest rate at the next meeting to be held in a month and a half. In addition, she was highly optimistic about the current situation, including inflation dynamics, economic activity, and the external environment. However, this optimism goes against the real state of affairs. As a result, her comments caused some anxiety, thus exerting pressure on the ruble. Now the pair is expected to stabilize in the range of 76 to 77 rubles per dollar. 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
00:18 Oil Market Situation
00:49 Brent
01:33 Banking Crisis and Oil
02:05 Gold
02:59 USD/RUB
03:13 Nabiullina Press Conference Results
04:02 Conclusion

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