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Oil Rises as Technicals Provide Support and Natural Gas Rallies - BLOOMBERG
(Bloomberg) -- Oil settled near $71, the highest close in two weeks, supported by technicals and higher natural gas prices.
West Texas Intermediate crude held above its 100-day moving average, a key technical level that spurred more buying. Algorithmic traders on Monday flipped to a net-long position in Brent crude after being short since mid-October, according to data from Bridgeton Research Group.
Prices also rose as colder-than-normal weather forecast drove natural gas futures up 20%, the most since the contract started trading in 2012. Gas tightness could stimulate short-term oil consumption amid an otherwise tepid demand outlook.
“Cold weather and geopolitical risks drove discretionary traders to go long, and the higher prices attracted the trend followers,” said Bart Melek, global head of commodity strategy at TD Securities.
Still, the market remains rangebound, buffeted by concerns of a 2025 supply glut and ongoing geopolitical conflicts in the Middle East. Traders also await Donald Trump’s inauguration in January to see how the incoming administration may impact crude supply and demand.
--With assistance from Maggie Eastland.
