Crude Oil to Fall Further on Increased Fundamental Pressure

Crude oil made quite a reversal on Monday from falling $5 and breached below this year’s low following rumors that OPEC would increase production by 500 barrels per day at its next meeting in December. But Saudi officials denied those rumors and bounced on crude oil

The 100 SMA rejected US crude yesterday

We opened a long stern sell oil signal on the 100 SMA (green) yesterday as it resisted and that moving average rejected price. Although the 20 SMA (grey) turned into support, halting the decline, crude oil is now stuck between these two moving averages.

Despite the strong jump on Monday, we maintain a bearish bias towards crude oil. The latest rally to $94 was followed by a steady decline, indicating that the markets have digested all the news and decisions surrounding the Ukraine conflict and that central banks are pivoting, adjusting to the new reality and in a calmer mode change, driven by supply and demand. instead of speculation.

Skyrocketing inflation in the Western world, which reached a record high in the EU and a 40-year high in Britain, while price pressures eased somewhat in the United States, but were still four times above the 2% target. prompting the major central banks to raise interest rates to fight inflation. They signaled a slowdown, but the actions speak differently, with the RBNZ raising rates by 75 basis points early this morning.

While today’s FOMC meeting minutes may have some impact on risk sentiment, we’ll see when they come out. But before that, we released EIA crude inventories, which are expected to be -2.6 million. But API’s private inventories showed a larger uptake yesterday.

Expectations focused on:

  • Headline crude oil -1.1 million barrels
  • Distillates -0.6 mn barrels
  • Petrol +0.4 min

API inventories

US WTI Crude Oil Live Chart

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