Oil prices steadied on Wednesday, with WTI settling firmly below the $98 per barrel support level, trading around $95.5 per barrel. If WTI continues to decline, it may encounter support near $90 per barrel, while resistance can be found near the $112 per barrel level and higher up at $115 per barrel.
Heightened global recession fears have recently reduced the oil demand outlook, putting pressure on oil prices. Concerns that interest rate hikes could slow global economic growth reducing energy demand have pushed oil prices down. Stalling economic growth combined with fiscal tightening and soaring inflation gives rise to fears of recession, halting the ascend of oil prices.
Uncertainty over China’s oil demand is causing fluctuations in oil prices. China is the largest importer of crude oil and Covid lockdowns have dampened oil demand, pushing prices down. Last week, reports that China plans to stimulate its economy via a large stimulus package boosted the oil demand outlook. This week, however, reports of massive Covid testing in China and renewed restrictions have reignited fears of extensive lockdowns, pushing oil prices down.
On Wednesday, US oil inventories rose to 3.3M barrels over this week, exceeding expectations. Oil supplies remain tight, however, supporting oil prices. In their latest meeting, OPEC+ members discussed output goals for August but refrained from setting a goal for September’s production. OPEC+ maintained its output policy and kept its production goals for August to the same levels agreed in its previous meeting, raising its output by approximately 648,000 barrels a day. It remains to be seen, however, whether the bans on Russian oil will allow the organization to reach its output quotas.
Many OPEC members continue to underperform, raising doubts about whether the organization can maintain its output goal, and adding to supply concerns. On Tuesday, OPEC+ data showed that the organization produced 24.8 million barrels per day of crude oil in June, with production falling 1 million BPD short of the target levels. In addition, OPEC’s first forecast report for 2023 indicated that demand will continue to outpace supply, leading to oil shortages.
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.
You can customize your selection of which cookies you want to accept.
These cookies are necessary for the website to function correctly and cannot be switched off.
Functional cookies allow the website to remember users' preferences and the choices you make on the website such as username, region, and language.