- Crude Oil slides over 1.5% lower on Thursday with bearish elements taking over.
- Storm Rafael hits Cuba shores and is set to limit US Oil output while Trump is set to boost shale production substantially in the near future.
- The US Dollar Index fades further under profit-taking as markets now focus on the Fed interest rate-cutting cycle.
Crude Oil is facing selling pressure for a second day in a row after China exports decline yet again while projections look bleak for 2025 in terms of pricing. US President-elect Donald Trump has vowed to boost shale Oil production in the US, which would add more barrels of Oil to the markets. Meanwhile, the tropical storm Rafael is set to take out roughly 1.55 million barrels per day in production as of Friday.
The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, is fading under profit-taking from the steep rally that materialized after President-elect Donald Trump won the US presidential election over current Vice President Kamala Harris. Expect the focus now to dial down on Trump’s presidency until he takes office in January 2025, with the focus back on US economic numbers and the Federal Reserve (Fed), which is expected to cut its monetary policy rate by 25 basis points this Thursday.
At the time of writing, Crude Oil (WTI) trades at $70.70 and Brent Crude at $74.18
Oil news and market movers: Inventorie and Trump
- Tropical storm Rafael is hitting the shores of Cuba, making its way to the US Gulf region, Reuters reports.
- Oil imports into China sank again last month, highlighting the sluggish consumption in the largest consuming country while traders weigh the implications of Donald Trump capturing the White House and potential supply rises from OPEC+ in 2025, Bloomberg reports.
- On Wednesday, the Energy Information Administration (EIA) reported a surprise build of 2.149 million barrels in the week ending on November 1, bigger than the expected 1.8 million. The previous week’s number was a drawdown of 0.515 million barrels.
Oil Technical Analysis: OPEC+ needs to act
Crude Oil prices could be set for a bear cycle as Donald Trump is set to become the next US President in January 2025. Trump has already committed in the runup to the presidential election that regulation and permitting will become less strict. At the same time, funds allocated to green energy will be diverted towards shale Oil and fossil fuel projects. That means structural additional supply is set to be released in 2025, on top of OPEC+’s foreseen supply normalization.
On the upside, the hefty technical level at $74.20, with the 100-day Simple Moving Average (SMA) and a few pivotal lines, is the next big hurdle ahead. The 200-day SMA at $76.80 is still quite far off, although it could get tested in case tensions in the Middle East arise.
The 55-day SMA at $70.86, has lost control of the situation and no longer supports prices while being chopped up intraday. Traders need to look much lower at $67.12, a level that supported the price in May and June 2023. In case that level breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.
US WTI Crude Oil: Daily Chart
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.