Brent Crude Oil SpotShort
Oil and Lithium: Horizon in the Energy Transformation
The global energy market is undergoing dramatic changes, with oil and lithium playing a crucial role. As oil prices face a significant weekly drop, the extraction of lithium in oil fields, such as the Smackover Formation in the United States, offers a revolutionary opportunity for the energy industry. These developments reflect the current dilemma: the same reservoir that fueled combustion engines could now drive the transition to electric mobility.
Oil prices rose slightly on Friday in Asian trading, boosted by a drop in U.S. inventories. However, Brent and WTI futures are heading for a weekly loss of around 6%, the steepest since September, due to growing concerns about global demand. China's GDP data showed moderate growth, but the government's recent stimulus measures failed to generate the expected momentum, affecting market expectations. The strength of the U.S. dollar, coupled with concerns about higher U.S. interest rates, has put pressure on crude oil prices. In addition, geopolitical tensions in the Middle East, following Israel's response to an attack by Iran, have added a risk premium to oil prices. Traders fear that these conflicts could disrupt Iranian oil supplies, increasing volatility in an already volatile market.
At the same time, lithium extraction in oil fields is emerging as a promising solution. In the United States, the Smackover Formation has been the epicenter of research that seeks to take advantage of oil field brines, which contain lithium in large quantities. Companies such as ExxonMobil and Standard Lithium, in alliance with Equinor, are leading projects that could transform lithium production through advanced technologies such as direct lithium extraction (DLE), which would reduce the need for large evaporation ponds and increase commercial viability.
On the technical side, Brent crude oil (Ticker AT: BRENT) has been moving in a range between $95.11 and $71.47, its average trading range coinciding with the Point of Control (POC) around $82.00. At the moment the delta pressure indicators indicate a bearish pressure that coincides with an RSI at 45.69%. We have to watch the macroeconomic backdrop to see if the price of crude oil tries to test support again and returns towards the POC area or pierces in the direction of $68.46.
Although oil demand seems to be slowing down, the lithium boom and its importance for electric mobility shows an energy horizon where both resources could coexist, facilitating both traditional and future energy.
Ion Jauregui – ActivTrades Analyst
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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.
Oil prices rose slightly on Friday in Asian trading, boosted by a drop in U.S. inventories. However, Brent and WTI futures are heading for a weekly loss of around 6%, the steepest since September, due to growing concerns about global demand. China's GDP data showed moderate growth, but the government's recent stimulus measures failed to generate the expected momentum, affecting market expectations. The strength of the U.S. dollar, coupled with concerns about higher U.S. interest rates, has put pressure on crude oil prices. In addition, geopolitical tensions in the Middle East, following Israel's response to an attack by Iran, have added a risk premium to oil prices. Traders fear that these conflicts could disrupt Iranian oil supplies, increasing volatility in an already volatile market.
At the same time, lithium extraction in oil fields is emerging as a promising solution. In the United States, the Smackover Formation has been the epicenter of research that seeks to take advantage of oil field brines, which contain lithium in large quantities. Companies such as ExxonMobil and Standard Lithium, in alliance with Equinor, are leading projects that could transform lithium production through advanced technologies such as direct lithium extraction (DLE), which would reduce the need for large evaporation ponds and increase commercial viability.
On the technical side, Brent crude oil (Ticker AT: BRENT) has been moving in a range between $95.11 and $71.47, its average trading range coinciding with the Point of Control (POC) around $82.00. At the moment the delta pressure indicators indicate a bearish pressure that coincides with an RSI at 45.69%. We have to watch the macroeconomic backdrop to see if the price of crude oil tries to test support again and returns towards the POC area or pierces in the direction of $68.46.
Although oil demand seems to be slowing down, the lithium boom and its importance for electric mobility shows an energy horizon where both resources could coexist, facilitating both traditional and future energy.
Ion Jauregui – ActivTrades Analyst
*******************************************************************************************
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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