Stephen Innes
SPI Asset Management
Crude oil took a nosedive as supply-side pressures began to ease. The geopolitical risk premium, which had been inflating prices, started deflating when the US announced that Israeli Prime Minister Benjamin Netanyahu had accepted a bridging proposal to cool tensions between Israel and Hamas. A de-escalation in the Middle East could make that risk premium evaporate faster than a puddle in the desert sun.
Meanwhile, word from market intelligence over in Libya indicates that production at the Waha oil field has rebounded to its usual output of around 300,000 barrels per day, thanks to pipeline maintenance finishing ahead of schedule. However, it's not all smooth sailing—Libya's Sharara field remains offline due to a political standoff between rival governments, keeping a lid on a full recovery.
On the demand side, China remains a bit of a wildcard. Despite a surge in summer travel, the growing preference for high-speed rail and electric vehicles is putting a dent in gasoline consumption. According to a Bloomberg report, sales at China’s two biggest oil retailers, PetroChina and Sinopec, have slumped by over 5% since July.
The US, however, is a whole different kettle of fish, as Americans still love to hit the open road. Domestic demand is holding strong, with AAA reporting that bookings for domestic travel over the Labor Day weekend are up 9% year-over-year. So while China’s appetite for oil is cooling, Americans are revving up and hitting the highways, keeping some demand firmly in the tank.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
Recommended Content
Editors’ Picks
EUR/USD holds comfortably above 1.1100 after German sentiment data
EUR/USD stays in daily range above 1.1100 in the European session on Tuesday. The data from Germany showed that the ZEW Survey - Economic Sentiment slumped to 3.6 in September from 19.2 in August, making it difficult for the Euro to gather strength.
GBP/USD stays firm above 1.3200, US data eyed
GBP/USD is holding small gains above 1.3200 in the European session on Tuesday. Rising bets for a 50 bps Fed rate cut keep the US Dollar on the defensive and support the pair. Traders now look to the US Retail Sales to grab short-term opportunities later this Tuesday.
Gold slumbers in $2,580s ahead of US data, Fed decision
Gold (XAU/USD) plateaus in the $2,580s on Tuesday, ahead of the release of potentially market-moving US data later in the day and the Federal Reserve (Fed) meeting on Wednesday.
Canada CPI expected to show disinflationary trend extended into July
The Canadian Consumer Price Index is expected to lose further traction in August. The Bank of Canada has reduced its policy rate by 75 bps so far this year. The Canadian Dollar seems to have embarked on a consolidative phase.
Bitcoin approaches its $56,000 support level
Bitcoin is approaching a crucial daily support level of $56,000, hinting at a possible recovery. Ethereum faced rejection from the resistance level, suggesting a downward trend with weak momentum. In contrast, Ripple has bounced above the 100-day EMA, indicating a continued upward trend.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.