Choose country & language:

Oil prices plummet as geopolitical tensions ease

Home >  Daily Market Digest >  Oil prices plummet as geopolitical tensions ease

Written by:
Myrsini Giannouli

18 November 2022
Share the article

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. 

WTI 1hr chart


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.

Written by:
Myrsini Giannouli

Share the article:

Latest news

Dollar extends gains despite drop in treasury yields

Myrsini Giannouli 06 December 2023

Gold remains stable after a volatile session

Myrsini Giannouli 06 December 2023

Oil prices hit five-month lows

Myrsini Giannouli 06 December 2023

Bitcoin price breaks key $44,000 level

Myrsini Giannouli 06 December 2023
Why TopFX
13+ years

industry presence
as a Liquidity Provider

from 0.0 pips

and reliable execution


client funds


customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!