Despite Hurricane Idalia's growing strength, Gulf of Mexico oil production remains largely unaffected. While some precautionary evacuations occurred, the storm's trajectory suggests minimal impact on refineries and production. In contrast, Florida faces an imminent and historic Category 4 landfall. Catastrophic storm surges, destructive winds, and flooding are forecasted, with evacuations ordered in multiple counties. Power outages are already reported, potentially disrupting travel and gas pumping.
Meanwhile, the oil market reacts to tightening global supply rather than the storm. The American Petroleum Institute reported a significant 11.486 million barrel weekly supply drop, tightening supply-demand dynamics. Saudi Arabia plans to raise crude prices to Asia, capitalizing on global supply tightness due to its extended output cut.
Amid shifting geopolitical considerations, the Biden administration appears to be seeking oil alternatives from Venezuela and Iran, rather than traditional suppliers like Saudi Arabia. This move aligns with Saudi Arabia's strategy to maximize returns on its heavy oil amid tightening supplies, while Chinese economy still had not recovered and had not increased its oil demand.
On the technical side, both MACD and RSI are still showing BUY signals, although on the weekly chart the graph had formed an Evening Star, a strong reversal pattern.
If the trend reverses, the bears might start entering at the pivot point of 80.64 and the price might reach its support level of 77.80. On the other hand, if the current trend continues, the price might reach its resistance at 84.01.
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.
Meanwhile, the oil market reacts to tightening global supply rather than the storm. The American Petroleum Institute reported a significant 11.486 million barrel weekly supply drop, tightening supply-demand dynamics. Saudi Arabia plans to raise crude prices to Asia, capitalizing on global supply tightness due to its extended output cut.
Amid shifting geopolitical considerations, the Biden administration appears to be seeking oil alternatives from Venezuela and Iran, rather than traditional suppliers like Saudi Arabia. This move aligns with Saudi Arabia's strategy to maximize returns on its heavy oil amid tightening supplies, while Chinese economy still had not recovered and had not increased its oil demand.
On the technical side, both MACD and RSI are still showing BUY signals, although on the weekly chart the graph had formed an Evening Star, a strong reversal pattern.
If the trend reverses, the bears might start entering at the pivot point of 80.64 and the price might reach its support level of 77.80. On the other hand, if the current trend continues, the price might reach its resistance at 84.01.
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.