WTI Crude Oil Is Stuck in a Choppy Trading Range / Commodities / Crude Oil
Oil prices ended the week caughtbetween the headwinds of a tighter global supply and a lacklustre economicoutlook eroding consumers' purchasing power.
Macroeconomics
On Thursday, the greenback took off overthe value of 150 Japanese yen – a symbolic price mark – for the first timesince the 1990s.
A strong dollar reduces foreigninvestors' purchasing power in other currencies and thus demand. Therefore, theFed reinforced expectations that the central bank could raise ratesaggressively early next month, which should contribute to a significantslowdown in activity and demand. As for inflation, it barely fell in the UnitedStates in September over one year, to 8.2% against 8.3% in August.
U.S. Dollar Currency Index (DXY), dailychart
FundamentalAnalysis
Crude prices have oscillated betweenlosses and gains this week as concerns over the global economic slowdown clashwith caution over tighter supply. The market seems to be receiving mixedsignals now, with falling US oil inventories indicating increased demand in thecountry, while weak economic signals are having an adverse impact (on prices).
U.S.Crude Oil Inventories
On Wednesday, the Energy InformationAdministration's (EIA) released the weekly change in crude oil stocks, showinga drop of 1.725M barrels, while the forecasted figure predicted 1.380M barrelsin excess.
(Source: Investing.com)
Geopolitics
Belarus could take further steps towardsdirect involvement in the war in Ukraine, As food corridor talks continuebetween representatives from the United Nations and Russia in order to maintainan agreement on the departure of ships from Ukrainian ports. A "hiddenmobilization" would be underway after the announcement of the creation ofa joint military group between Russia and Belarus, according to the independentBelarusian newspaper "Nacha Niva". So far, the Belarusian army hasnot participated in the fighting on Ukrainian territory. Since the beginning ofthe conflict in Ukraine, Belarus has served as a logistics platform for itsRussian ally.
TechnicalCharts
WTI Crude Oil (CLZ22) Futures (Decembercontract, daily chart)
RBOB Gasoline (RBZ22) Futures (Decembercontract, daily chart)
Brent Crude Oil (BRNZ22) Futures(December contract, daily chart) – Contract for Difference (CFD) UKOIL
Havea nice weekend!
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Thank you.
Sebastien Bischeri
Oil & Gas Trading Strategist
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