ð OIL.WTI price plunging by 4%! Will the decline in oil prices affect the decisions of central banks?
The beginning of the week brought a clear setback in the oil market. Recall that before the weekend, the quotations of black gold tested the level of $95, and many analysts began to speculate that we might soon see a test of the $100 level per barrel of WTI variety. Today, crude oil is clearly losing, and the declines on OIL.WTI exceed 4%. Thus, the scenario assuming an increase towards $100 becomes less and less likely.
How oil prices will continue to evolve may influence the decisions of central banks. Expensive oil will indeed translate into higher inflation, so in the event of a return of the price to the downward trend, the probability of the Fed not raising rates this year will increase.
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OPEC ð°
Today's OPEC+ committee meeting ended without significant changes. However, oil is losing even though Saudi Arabia and Russia confirmed today their commitment to maintaining oil production cuts of over 1 million barrels per day until the end of the year. However, changes in attitude can be traced in the statements of Russian Deputy Prime Minister Novak, who emphasized today that supply constraints have a positive effect on the market and it is visible. On the other hand, Novak said that OPEC+ might change its policy and decisions if needed. Both countries will review their production policy monthly, while the entire OPEC+ group will set its strategy for 2024 during the November meeting.
Looking technically at the H4 chart, the quotations dynamically retreated after reaching the level of $95. The quotations managed to negate the lower limit of the 1:1 setup, which, according to the Overbalance methodology, may indicate a change in trend to a downward one. However, special attention should still be paid to the support at $84.75, where the lower limit of the upward channel and the previous peaks from August 10 fall. It seems that only crossing this level could lead to a larger sell-off. For now, the main trend remains upward, and the current (though dynamic) move down should be treated only as a correction.
Source: xStation5
