-1727774072.png)
Oil Pushing Lower
Oil prices are pushing lower today, weighed on by a stronger US Dollar and fresh concerns about oversupply in the market. Notably, worrying developments in the Middle East have failed to boost oil prices, suggesting that for now traders are attaching little market-risk to the current situation in Lebanon. This could still change if, for example, Iran became involved in the conflict with Israel. However, for now, oil is taking its cues from elsewhere.
Powell Rates Pushback
On the Dollar front, comments from Fed’s Powell yesterday fell on the more hawkish side. The Fed chair pushed back against those calling for further .5% rate cuts, noting that the Fed’s projects two further .25% cuts as its base-case scenario. Looking ahead this week, US labour market data on Friday will be crucial for USD direction and have a major impact on commodities prices. Fresh weakness in the readings should boost easing expectations, sending USD lower and commodities prices higher. However, any surprise upside will likely see USD push higher near-term, weighing on commodities prices.
Oversupply Concerns
Finally, oversupply concerns are also weighing on sentiment here. Weak Chinese manufacturing data earlier in the week has curbed any demand optimism linked to recent Chinese stimulus. Additionally, traders are focusing on the winding down of some OPEC+ output restrictions in December which will bring more oil online. With US data weakening also, crude sentiment looks likely to remain skewed to the downside here.
Technical Views
Crude
The failure at the 72.61 level has seen the market turning heavily lower. Price is now testing below the bear channel lows and below the 67.45 level. Below here, and with momentum studies bearish now also, focus is on a test of 63.83 next.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.