Oil prices plummeted on Monday, with WTI prices dropping near $86 per barrel. If the WTI price declines, it may encounter support near $82.1 per barrel, while resistance can be found at the $90.3 per barrel level.
Expectations of reduced demand have brought oil prices down on Monday. The dollar’s rally also contributed to the decline in oil prices.
Lower-than-expected factory activity data in China renewed fears of declining oil demand on Monday. China is the world’s largest energy importer and concerns about renewed lockdowns are stifling oil demand. China’s zero-Covid policy has isolated the country and has dealt a heavy blow to its economy. In addition, lower-than-expected data for Chinese oil demand last week has put pressure on oil prices. Although demand increased in September compared to August, Chinese crude oil import data is approximately 2% lower than last year.
The Biden administration has recently announced the release more of barrels from the US Strategic Petroleum Reserves, checking the ascend of oil prices. Oil prices remain high ahead of the US midterm elections, causing a headache for the US government. US President Joe Biden announced a plan to sell 15 million barrels from the SPR representing the latest tranche of the 180-million-barrel program.
Aggressive rate hikes stifle economic activity, undercutting oil demand. The next Fed monetary policy meeting is on Wednesday, November 2nd and its outcome is expected to affect oil prices. The US Central Bank has so far increased interest rates by a total of 300 basis points this year, bringing its benchmark interest rate to 3.25%. Another rate hike of at least 75 bps is expected at Wednesday’s meeting and has already been largely priced in by markets.
OPEC+ recently decided on a massive output cut of 2 million BPD starting in November. OPEC performed the largest reduction since 2020 in a bid to raise prices, led by Saudi Arabia and Russia. OPEC+ members strive to reclaim the $100 per barrel key level despite mounting global recession risks.
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.
as a Liquidity Provider
and reliable execution
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.