Crude Oil Prices Keep Falling. Is It Time to Get Long on Black Gold? / Commodities / Crude Oil
Crude oil continues to decline due tolowered demand, and the petrodollar seems threatened, losing interest. What isthe best strategy to take now?
Oil prices kept falling this week, drivenby potential progress in Ukraine-Russia talks and a potential slowdown in theGiant Panda’s (China) economic growth due to epidemic lockdowns in some regionswhere a surge of Omicron was observed.
As I mentioned in myprevious article, India considers getting Russian crude oil suppliesand other commodities at a reduced price by settling transactions through arupee/rouble payment system. Meanwhile, we keep getting rumors – notablyreported by TheWall Street Journal – that Saudi Arabia and China are also currentlydiscussing pricing some Saudi oil exports directly in yuan. The Chinese areactively seeking to dethrone the dollar as the world’s reserve currency, andthis latest development suggests that the petrodollar is now under threat.
US Dollar Currency Index (DXY) CFD (dailychart)
The recent correction in crude oil, happeningjust seven days after reaching its 14-year highs, might show some signs thatthe conflict in Ukraine will slow down consumption. On the other hand, ifIranian and Venezuelan barrels flooded the market, we could see crude oil,petroleum products, and distillates turning into new bear markets.
WTI Crude Oil (CLJ22) Futures (Aprilcontract, daily chart)
Brent Crude Oil (BRNK22) Futures (Maycontract, daily chart)
RBOB Gasoline (RBJ22) Futures (Aprilcontract, daily chart)
Henry Hub Natural Gas (NGJ22) Futures(April contract, daily chart)
That’sall folks for today – happy trading!
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Thank you.
Sebastien Bischeri
Oil & Gas Trading Strategist
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