Oil continues to trade under pressure this week. Brent (OIL) is down almost 15% off the local high reached in late-October and trades 6% lower week-to-date. OIL moved below $80 per barrel mark this afternoon, reaching the lowest level since late-July 2023. However, this break was short-lived and price has recovered slightly since.
A recent boost oil has received following the launch of the Hamas-Israel war has been completely erased already as the conflict did not spill over the broader Middle East region and remains limited to Israel and Gaza Strip, which are not important players in the global oil markets. As markets are no longer expecting conflict to escalate and disrupt oil supplies in the region, economic concerns resurfaced as a key driver of oil price moves. The United States expects domestic gasoline demand to drop to 20-year low next year while recent trade data from China painted a mixed picture of the economy. On top of that, API report released yesterday pointed to a massive 11.9 million barrel build in US oil inventories, while the market expected a small 0.3 million barrel drop. However, as the US Energy Information Administration is completing system upgrades this week, we will have to wait for the official government report on oil inventories until next week.
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Create account Try a demo Download mobile app Download mobile appTaking a look at Brent (OIL) chart at D1 interval, we can see that price broke below a $82.50 support zone yesterday, marked with previous price reactions as well as 200-session moving average (purple line). Declines deepened today with OIL dropping over 1%. A test of the $80 per barrel zone was made this afternoon but sellers failed to break below on the first attempt.
Source: xStation5
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