Hello Traders,
Here’s an update on Crude Oil following our previous update before the BRICS summit in Kazan last month. ( https://ec2-3-10-108-215.eu-west-2.compute.amazonaws.com/blog/crude-oil-update-selling-pressure-resumed-last-week-ahead-of-brics-summit-chinas-weak-demand-continues/)
Oi prices remained under pressure with more sideways to lower price action and currently trading at the $68 area while OPEC cut its forecast for global oil demand growth in 2024 and also lowered its projection for next year, marking the producer group’s fourth consecutive downward revision. Apart from the higher supply levels the BRICS summit continued to add pressure to prices with the de-dollarization risks to intensify and thus prices as they are measured in dollar to remain under pressure.
On the market’s technical outlook last month’s bounce and recent peak on 08.10.2024 appears that could be yet another corrective bounce for the multi month downtrend since March 2022.
Crude Oil Futures – Technical Outlook – 2 Trendlines In Focus In Case Of Another Bounce
In the short term we can see that the decline from 08.10.2024 peak looks to have been deep and the follow up bounce failed to provide a new trend an prices falling back down to the $68 area. As long as prices stay below 08.10.2024 then the down trend could potentially continue and should not be a surprise seeing the market trading below the $63 area in the near future.
Yet another factor hat could limit oil demand growth is the foreign policy team Trump is putting together. Trump is expected to tap U.S. Senator Marco Rubio to be his secretary of state, sources said. Rubio has in past years advocated for a muscular foreign policy with respect to America’s geopolitical foes, including China, Iran and Cuba. Additionally, Trump’s plan for aggressive tariffs on imports while he has plans to increase more the supply and the opening of more oil mining projects.
Tomorrow’s Crude Oil Inventories could add some short term volatility so traders should be aware and having in mind the short term pivots above. Fundamentals and technical provide with higher probabilities to the downside rather than any potential bounce or rally overall.
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