U.S. Demand and Uncertainty Drive Oil Volatility
The oil market continues to show strong oscillations, influenced by geopolitical factors and fluctuations in global demand. Recently, oil prices rose on the back of a surprise drop in U.S. crude and gasoline inventories, suggesting stronger-than-expected demand for the fuel. In early Asian trading, Brent (Ticker AT: BRENT) was up 0.65% at USD 73.02 per barrel, while West Texas Intermediate (Ticker AT: LCRUDE) was up 0.63% at USD 69.04 per barrel. These increases reflect the positive impact of US demand and reduced crude imports, extending a momentum that drove both contracts up by more than 2% on Wednesday.
At the start of the European session, the market did not correct this rise, but some downward pressure is perceptible. Technical indicators show a strong trading zone around USD 72.30 for Brent and USD 68.55 for WTI, with the RSI balanced at 50%, suggesting that the market could consolidate in this zone as support before a possible rise towards the end of the week.
Geopolitical and Oversupply Effect
Since Iran's attack on Israel on October 1, crude oil prices have experienced remarkable volatility. In October, Brent went as high as almost 10% in just four days, reaching USD 80 before retreating following an Israeli bombing in Iran on October 26. This led to a significant drop in prices on Monday 28, where Brent fell by more than 4% to USD 71.42, while WTI lost more than 5% to USD 67.38.
This situation takes place in a context of oversupply, where gasoline inventories in the US (Ticker AT: GASOLZ2024) have fallen to two-year lows. Against a backdrop of low global demand, both the International Energy Agency (IEA) and OPEC have revised their demand forecasts for this year, mainly due to the economic slowdown in China. Despite the stimulus in the Chinese economy, demand remains weak, affecting crude oil consumption projections.
Short and Medium-Term Outlook
The market is also watching the possibility of OPEC+ postponing a 180,000 barrels per day production increase planned for December in order to stabilize prices. In parallel, the upcoming U.S. presidential election and expectations of further stimulus in China could influence oil demand in the short term, the projection of its movement a price range for oil between USD 70 and USD 85 in the medium term.
This scenario reflects the complexities of the current market, where supply, demand and geopolitical events will continue to drive fluctuations in crude oil prices.
Ion Jauregui - Analyst ActivTrades
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
At the start of the European session, the market did not correct this rise, but some downward pressure is perceptible. Technical indicators show a strong trading zone around USD 72.30 for Brent and USD 68.55 for WTI, with the RSI balanced at 50%, suggesting that the market could consolidate in this zone as support before a possible rise towards the end of the week.
Geopolitical and Oversupply Effect
Since Iran's attack on Israel on October 1, crude oil prices have experienced remarkable volatility. In October, Brent went as high as almost 10% in just four days, reaching USD 80 before retreating following an Israeli bombing in Iran on October 26. This led to a significant drop in prices on Monday 28, where Brent fell by more than 4% to USD 71.42, while WTI lost more than 5% to USD 67.38.
This situation takes place in a context of oversupply, where gasoline inventories in the US (Ticker AT: GASOLZ2024) have fallen to two-year lows. Against a backdrop of low global demand, both the International Energy Agency (IEA) and OPEC have revised their demand forecasts for this year, mainly due to the economic slowdown in China. Despite the stimulus in the Chinese economy, demand remains weak, affecting crude oil consumption projections.
Short and Medium-Term Outlook
The market is also watching the possibility of OPEC+ postponing a 180,000 barrels per day production increase planned for December in order to stabilize prices. In parallel, the upcoming U.S. presidential election and expectations of further stimulus in China could influence oil demand in the short term, the projection of its movement a price range for oil between USD 70 and USD 85 in the medium term.
This scenario reflects the complexities of the current market, where supply, demand and geopolitical events will continue to drive fluctuations in crude oil prices.
Ion Jauregui - Analyst ActivTrades
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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