Chat with us, powered by LiveChat

Choose country & language:

Close Icon

Oil prices rise ahead of G7 talks

Home >  Daily Market Digest >  Oil prices rise ahead of G7 talks

detail_image_market
author_img

Written by:
Myrsini Giannouli

28 June 2022
Share the article

Oil prices edged higher this week, in anticipation of the outcome of the G7 meeting. WTI price climbed to $112 per barrel, boosted by expectations of new sanctions on Russian oil exports. If the WTI price retreats, support can be found further down near $98 per barrel, while resistance can be found near the $121.2 per barrel level and higher up at $130 per barrel. 

Concerns that interest rate hikes could slow global economic growth, and reduce energy demand, have pushed oil prices down in the past couple of weeks. An increasing number of major Central Banks are moving towards a tighter fiscal policy to tame soaring inflation rates. Stalling economic growth, combined with fiscal tightening gives rise to fears of recession. 

In its latest policy meeting, the US Federal Reserve voted to raise its benchmark interest rate by 75 points, while the BOE raised its interest rate by 25 base points. Other major banks, such as the Bank of Switzerland and the Bank of Canada, are also raising their interest rates, halting the ascend of oil prices. 

The oil demand outlook has increased though, as in the summer there is increased traveling and driving, boosting oil demand. The zero-Covid lockdown in Shanghai has officially ended, increasing the demand outlook and boosting oil prices. It seems however that Covid restrictions are not over in China, creating uncertainty in oil demand. China is the largest importer of crude oil and Covid lockdowns have dampened oil demand, pushing prices down. 

Geopolitical tensions also support oil prices, as tight supply raises fears of an energy crisis, especially in the EU. The latest package of EU sanctions against Russia includes a ban on Russian oil imports that will effectively reduce EU oil imports from Russia by 90% by the end of the year and end the EU’s dependency on Russian oil. Russia is retaliating, however, by limiting its natural gas exports in certain EU countries, further exasperating the EU’s energy problem. EU leaders met in Brussels on Friday to discuss the energy shortages stemming from the reduced Russian gas supplies. G7 leaders are meeting this week to discuss further sanctions on Russian oil, possibly by enforcing a price cap on Russian oil exports.

Many OPEC members continue to underperform, raising doubts on whether the organization can maintain its output goal. This week, two OPEC meetings have been scheduled and are likely to draw the attention of market participants. OPEC members will meet on the 29th and a meeting of OPEC+ will take place on the 30th. In its meeting this week, OPEC+ will likely discuss its output goals for August and the next few months. OPEC+ is expected to keep production goals for August to the same levels set in its previous meeting, in which the organization’s members had agreed to raise their output goal by approximately 648,000 barrels a day. It remains to be seen, however, whether the bans on Russian oil have allowed the organization to reach its output quotas.

WTI 1hr chart

TRADE WTI

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.

author_img

Written by:
Myrsini Giannouli

Share the article:

Latest news

main_image_market

US economic growth boosts Dollar

Myrsini Giannouli 29 March 2024
main_image_market

Gold prices rise to a fresh all-time high

Myrsini Giannouli 29 March 2024

Oil prices gain strength on supply concerns

Myrsini Giannouli 29 March 2024

Bitcoin breaks through $70,000 barrier

Myrsini Giannouli 29 March 2024
Why TopFX
10-years
13+ years

industry presence
as a Liquidity Provider

Spreads
Spreads
from 0.0 pips

and reliable execution

Segregated
Segregated

client funds

First-class
First-class

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!

IMPORTANT

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

Cookies on TopFX

The TopFX website uses cookies to optimise user experience.

These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.

Manage Preferences

You can customize your selection of which cookies you want to accept.

  • Essential

    These cookies are necessary for the website to function correctly and cannot be switched off.

  • Functional

    Functional cookies allow the website to remember users' preferences and the choices you make on the website such as username, region, and language.

  • Marketing

    These cookies are used to track visitors across our websites and show you more relevant ads. Marketing cookies also include third-party cookies from partners. For more information relating to data protection & collection please view our Privacy Policy and Cookie Disclosure.