Oil prices plummeted on Thursday, with WTI price testing the $82.2 per barrel support. If the WTI price declines, it may encounter further support near $76.5 per barrel, while resistance can be found at $90.3 per barrel and further up at $97.8 per barrel.
A missile landing in Poland earlier in the week threatened to bring the Russia-Ukraine war to a wider area and triggered an emergency NATO meeting on Wednesday. NATO Secretary General Jens Stoltenberg stated after the conclusion of the meeting that the deadly missile likely came from Ukraine’s air defense system. NATO’s statement helped dissipate rumors that the errant missiles were an attack against Poland by Russia. Geopolitical tensions eased on Thursday, putting pressure on oil prices.
In addition, oil flows on the Druzhba pipeline from Russia to Hungary were resumed on Wednesday after being temporarily suspended, as they had sustained damage in Moscow’s latest assault on Ukraine.
Surging Covid cases in China are also pushing oil prices down. The country continues to grapple with rising Covid cases, with heavy restrictions impacting economic output. Beijing and other major Chinese cities reported record coronavirus cases this week, dashing expectations of ending lockdowns. On Friday, some restrictions were lifted and oil prices spiked upwards on a positive oil demand outlook. Health authorities in China, however, seem committed to keeping the strict lockdowns and quarantines in place for the time being. The uncertainty over oil demand in China has influenced oil prices considerably as China is the world’s largest energy importer and zero-Covid restrictions severely limit oil demand.
Oil prices gain support from the dollar’s weakness, as US PPI inflation data came out softer than expected on Tuesday. Cooling US inflation has reduced Fed rate hike odds, diminishing global recession concerns. October’s US inflation print came below expectations, bringing the dollar down. Market expectations of future rate hikes were considerably trimmed after last week’s inflation report and were further diminished after Tuesday’s inflation print. Aggressive rate hikes stifle economic activity, undercutting oil demand and putting pressure on oil prices.
Concerns of political uncertainty in the US caused market turmoil last week, putting pressure on oil prices. Concerns that political instability may tip the country into recession, reducing oil demand, have sent oil prices plummeting. The results of the elections were close, with the votes being tallied for a week. Republicans eventually wrested control of the House from the Democrats, winning the elections with a narrow majority.
The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.
Fill in the registration
form and click
Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.
When your live account is approved, you can deposit funds and start trading on your chosen platform!
The website you are now viewing is operated by TopFX Global Ltd, an entity which is regulated by the Financial Services Authority (FSA) of Seychelles with a Securities Dealer License No SD037 that is not established in the European Union or regulated by an EU National Competent Authority.
If you wish to proceed please confirm that you understand and accept the risks associated with trading with a non-EU entity (as these risks are described in the Own Initiative Acknowledgment Form and that your decision will be at your own exclusive initiative and that no solicitation has been made by TopFX Global Ltd or any other entity within the Group.
Don't show this message again
These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.