oil is making a head and shoulder pattern and rallied due to USD weakness .keep an eye on the neckline to know whether upside move is happening or not.
see my DXY analysis as may help.DXY will make a short rally which could be a bearish factor for WTI for a while
fundamental view:
The U.S. Dollar is trading at a seven-month low against a basket of major currencies at the mid-session. A weaker greenback tends to boost demand for dollar-denominated oil, making it more attractive to foreign buyers.
The dollar index is testing its lowest level since June 6, following data on Thursday that showed cooling U.S. inflation, firming up expectations the Federal Reserve will slow the pace of its interest rate hikes.
In other news, the University of Michigan Surveys on Friday showed that U.S. consumers believe price pressures would ease back to levels seen in the spring of 2021 over the next year.
Bullish traders are betting on more price gains as traders anticipate a further drop in Russian supply and the normalization in China’s fuel demand. Some buyers expect to see further signs of recovering oil demand in the form of higher Chinese crude imports and possible increases in the demand outlooks for energy agencies like the International Energy Agency (IEA) and OPEC.
Nonetheless, traders should be prepared for periodic bouts of selling pressure due to the current looseness of the oil balance.
see my DXY analysis as may help.DXY will make a short rally which could be a bearish factor for WTI for a while
fundamental view:
The U.S. Dollar is trading at a seven-month low against a basket of major currencies at the mid-session. A weaker greenback tends to boost demand for dollar-denominated oil, making it more attractive to foreign buyers.
The dollar index is testing its lowest level since June 6, following data on Thursday that showed cooling U.S. inflation, firming up expectations the Federal Reserve will slow the pace of its interest rate hikes.
In other news, the University of Michigan Surveys on Friday showed that U.S. consumers believe price pressures would ease back to levels seen in the spring of 2021 over the next year.
Bullish traders are betting on more price gains as traders anticipate a further drop in Russian supply and the normalization in China’s fuel demand. Some buyers expect to see further signs of recovering oil demand in the form of higher Chinese crude imports and possible increases in the demand outlooks for energy agencies like the International Energy Agency (IEA) and OPEC.
Nonetheless, traders should be prepared for periodic bouts of selling pressure due to the current looseness of the oil balance.
Comment:
WTI reached the $80 level. At this point, if we do get a move higher, that could open up the $85 level, as we have been consolidating just above the 200-Week EMA. However, it’s also possible that we simply continue to grind back and forth in this area. After all, there are a lot of questions being asked right now about the global demand for crude oil as the economy seems to be slowing down. Because of this, I would expect choppy behavior to say the least. That being said, if we were to break down below the lows of the last couple of months, that could open up a move down to the $65 level
Comment:
The West Texas Intermediate Crude Oil market
has rallied slightly during trading on Monday, as we continue to see upward pressure. We had broken above the neckline a couple of sessions ago, pulled back to test it again, and also saw the 50-Day EMA offer support. Whether or not crude oil can continue to go higher is still an open question, so I believe that if we were to break above the top of the candlestick from last week that was the high, then it would bring in more money, perhaps sending crude oil to the 200-Day EMA, hanging around the $86.12 level.
has rallied slightly during trading on Monday, as we continue to see upward pressure. We had broken above the neckline a couple of sessions ago, pulled back to test it again, and also saw the 50-Day EMA offer support. Whether or not crude oil can continue to go higher is still an open question, so I believe that if we were to break above the top of the candlestick from last week that was the high, then it would bring in more money, perhaps sending crude oil to the 200-Day EMA, hanging around the $86.12 level.
Comment:
Despite bullish outlook, the crude oil market could still face some headwinds because of a recession. This won’t totally derail the chances of a bull market in crude oil, but it could slow growth. It all depends on whether the recession is a soft or hard one.
Furthermore, there is still a little uncertainty over how quickly China’s crude demand bounces back this quarter. A lot will depend on how fast China opens its borders and whether the current Lunar New Year celebrations leads to a surge in COVID-19 cases.
Furthermore, there is still a little uncertainty over how quickly China’s crude demand bounces back this quarter. A lot will depend on how fast China opens its borders and whether the current Lunar New Year celebrations leads to a surge in COVID-19 cases.
Comment:
U.S. economic concerns are bearish for crude prices as warnings about future earnings from several mega-cap technology companies have sparked concern about a broader slowdown in the economy that would curb energy demand.
Delegates from OPEC+ said the group would maintain its crude production targets at current levels when they meet on Feb 1, as they await clarity on the recovery in consumption in China and the impact of sanctions on Russian crude supplies.
A bullish factor for crude is the removal of China's pandemic travel restrictions that have bolstered expectations for a jump in domestic and international flights in China during the week-long Lunar New Year that began on Saturday.
China boosted its crude import quotas earlier this month, a sign from the world's largest crude importer that it is gearing up to meet higher demand. As of last week, China has issued a combined 132 million metric tons (MMT) of quotas for crude imports in 2023, well above the quota for 109 MMT at the same time last year.
In a bullish factor, Vortexa reported Monday that the amount of crude stored on tankers that have been stationary for at least a week fell -1.2% w/w to 86.77 million bbl in the week ended January 20
Delegates from OPEC+ said the group would maintain its crude production targets at current levels when they meet on Feb 1, as they await clarity on the recovery in consumption in China and the impact of sanctions on Russian crude supplies.
A bullish factor for crude is the removal of China's pandemic travel restrictions that have bolstered expectations for a jump in domestic and international flights in China during the week-long Lunar New Year that began on Saturday.
China boosted its crude import quotas earlier this month, a sign from the world's largest crude importer that it is gearing up to meet higher demand. As of last week, China has issued a combined 132 million metric tons (MMT) of quotas for crude imports in 2023, well above the quota for 109 MMT at the same time last year.
In a bullish factor, Vortexa reported Monday that the amount of crude stored on tankers that have been stationary for at least a week fell -1.2% w/w to 86.77 million bbl in the week ended January 20
China boosted its crude import quotas on Monday, a sign from the world's largest crude importer that it is gearing up to meet higher demand
Increased OPEC crude output is bearish for oil prices. OPEC Dec crude production rose +150,000 bpd to 29.140 million bpd. OPEC+ on December 4 decided to keep the group's crude production targets unchanged for January, in line with expectations. OPEC+ will meet again on February 1 to discuss its production targets.
Crude oil prices found support after Russia's Deputy Prime Minister Alexander Novak said in late December that Russia might cut production by 500,000-700,000 bpd in response to Europe’s partial oil embargo on Russian oil imports