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Crude oil drops on demand concerns After yesterday’s sharp drop, crude oil prices extended their losses first thing this morning, before bouncing off their lows. Oil was already under pressure on fears about demand following the weaker Chinese industrial data that was released on Tuesday and the larger crude build in the US as was reported by API on Tuesday. But prices fell about 3% after official data from the EIA showed a build of 2.7 million barrels on Wednesday, its fourth weekly build. The fact that these macro factors pushed crude oil below key short-term support at around the $84.00 - $84.50 area, this gave rise to further technical selling. Still, with the Middle East situation at the forefront of investors’ minds, the downside could be limited from here. At the time of writing, WTI was testing a key support area just below the $82 handle. Middle East concerns should keep downside limited Today we haven’t heard anything new related to the situation between Iran and Israel. UK’s foreign secretary and former prime minister David Cameron visited Israel’s PM Benjamin Netanyahu to help prevent escalation on Wednesday. Cameron said: "We hope that anything Israel does is as limited and as targeted and as smart as possible. It's in no-one's interest that we see escalation and that is what we said very clearly to all the people I've been speaking to here in Israel." However, Netanyahu wasn’t having it, telling Cameron that Israel would "make its own decisions" over how to respond to Iran’s attack, vowing to do everything necessary to defend the nation. So, there was no fresh support for oil concerning potential supply disruptions in the Middle East, leaving traders to concentrate on other factors. They realised that the demand outlook for oil is not so rosy after all. Demand concerns arose after weaker economic data was released from China on Tuesday, while the possibility of prolonged higher interest rates are also casting a shadow on the global economic recovery, and thus the oil demand outlook. Federal Reserve Chair Jerome Powell's recent more hawkish stance has tempered hopes for significant rate cuts this year, potentially leading to a slowdown in economic growth, which could further dampen the outlook for oil demand. With the US dollar has surging to a five-month high this week, this is amplifying the cost of oil for foreign buyers. Still, the decline in oil prices is likely to be limited. Ongoing geopolitical tensions in the Middle East, particularly concerning Israel's response to Iran's recent weekend attacks, is something that could support prices and push them higher in the event of a strong counterattack by Israel. WTI technical levels to watch While the short-term trend for oil may not appear bullish, the longer-term bullish technical outlook remains intact, and will remain that way until we see a major lower low form. Wednesday’s selling got a boost after prices fell below the technically important $84.00 - $84.50 support area. This $84.00 - $84.50 region is now key in terms of potential resistances to watch moving forward. The next key support level to watch is just below the $82 area on WTI, where the last rally around the end of last month started. Below here is the longer-term bullish trend line that comes in around the $80.00 area or so. -- Written by Fawad Razaqzada, Market Analyst with Forex.com Follow Fawad on Twitter @Trader_F_R
FOREXCOM:USOIL
by FOREXcom
higher prices on Crude oil (update) If prices continue to struggle going bullish after inventory or week come in red. I expect prices to drop into mitigation and if that happens you will see an explosive move on oil. Otherwise, they should take buy side liquidity @70.77 and come back into internal range (mitigation/volume imbalance) Mind you, if the fed also cuts rates today that will weaken the USD and strengthen foreign currencies creating more demand for oil and short inventory reports will surge prices higher.
NYMEX:MCL1!
by jewlstagara
1
WTI Crude oilOur overview: Despite EIA report a big draw in stock and the impact of the Red Sea commercial routes disruption, is still not clear, the market experienced a deep selloff. In our opinion due to end of year portfolios correction and take profit. Trends analysis: Primary(purple): upward corrective structure wave B, intermediate(green): downward corrective structure wave B, minor(yellow): upward corrective structure wave A, intraday(orange): upward impulsive structure wave 1. Our current strategy: Aggressive Long looking for a technical rebound with first target @$73.80. Our current position's risk profile @$72.20: delta +0.48, gamma +0.19 Hedging point: on breakout $71.50
NYMEX:CL1!Long
by DeltaZeroProprietaryTrading
WTI BULLISH OUTLOOK AND POSSIBLE STRATEGIESWith recent market dynamics, the oil trading landscape has witnessed significant shifts, presenting traders with lucrative opportunities. Here are actionable strategies tailored to capitalize on these developments. 1. Fed's Dovish Stance and Demand Surge: The Federal Reserve's dovish outlook coupled with the International Energy Agency's upgraded oil demand forecast signals a potential uptick in oil consumption. This suggests a bullish trend for oil prices. Traders could consider entering long positions or call options in anticipation of a sustained price increase due to heightened demand projections. 2. OPEC's Tightening Supply Scenario: OPEC's report highlighting a potential deficit in the oil market, especially if OPEC+ production cuts persist, indicates a tightening supply situation. Traders may benefit from this by leveraging the anticipated supply shortage. Long-term positions or bullish spreads might be favorable strategies to capitalize on the potential price rally resulting from constrained supply. 3. Declining U.S. Oil Inventories and Weakening Dollar: The Energy Information Administration's data revealing a substantial drop in U.S. oil inventories, alongside the weakened dollar, strengthens the bullish sentiment. Considering the reduced supply and increased affordability of oil due to the dollar's decline, traders could explore long positions or bullish futures contracts to align with the rising prices. 4. Geopolitical Tensions in the Middle East: Ongoing geopolitical tensions in the Middle East, particularly recent attacks on vessels, add to the uncertainty surrounding oil supply. Traders might view this as an opportunity for short-term gains through cautious but strategic investments, keeping an eye on potential supply disruptions that could trigger price spikes. In conclusion, recent market developments indicate a favorable landscape for bullish trading in the oil market. Traders can consider adopting long positions, call options, or bullish spreads to capitalize on the projected increase in demand, tightening supply, weakened dollar, and geopolitical uncertainties. However, it's crucial to stay informed and adaptable to swiftly respond to evolving market conditions for optimal trading outcomes. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
BLACKBULL:WTILong
by legacyFXofficial
WTI BEARISH OUTLOOKOil prices saw a decline due to skepticism about OPEC+'s output cuts and concerns over growing supply overshadowing potential disruptions in the Middle East. U.S. crude settled 1.4% lower at $73.04 a barrel, and Brent dropped 1.1% to $78.03 a barrel. Despite announcements of output cuts, the lack of confidence in compliance and doubts about measurement methods have cast shadows on the effectiveness of these measures. Geopolitical events, such as attacks in the Red Sea, have revived concerns about potential disruptions to Middle Eastern oil supplies, amplifying market anxieties. Additionally, fears of decreased demand and weak global manufacturing activity in November added pressure on prices. Technical indicators signaled bearish sentiment, indicating possible support levels at $66.78 and a potential rebound around $74.75. Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
BLACKBULL:WTIShort
by legacyFXofficial