- Crude Oil unable to find support and sinks again.
- Markets are looking at developments in the Middle East, with President Biden set to speak to Israel’s Prime Minister Netanyahu.
- The US Dollar Index is printing a fresh September high and is erasing a weekly loss.
Crude Oil dives lowr and adds to the 4% correction from the previous day when Israel refrained from responding firmly to the recent attacks from Iran. Israel has been halted by United States (US) President Joe Biden, who asked not to attack Iranian oil fields and vital infrastructure. With a call between US President Biden and Israel’s Prime Minister Benjamin Netanyahu later this Wednesday, a risk for a large strike is still a present danger that could get priced in very quickly.
The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, is recovering its earlier poor performance from the beginning of this week. On Wednesday, markets await the publication of the September meeting's Federal Open Market Committee (FOMC) Minutes, as traders will be able to get more information on the main drivers for the big 50 basis points rate cut and what this could mean going forward.
At the time of writing, Crude Oil (WTI) trades at $71.43 and Brent Crude at $75.32
Oil news and market movers: All eyes on US-Israel talks
- The American Petroleum Institute (API) reported a build of 10.9 million barrels on the week ending October 4, compared to the smaller 1.95 million barrels expected and following the drawdown of 1.5 million barrels the previous week.
- At 14:30 GMT, the Energy Information Administration (EIA) will release the Crude Oil stockpile change for the week ending October 4. Expectations are for a small build of 2.0 million barrels compared to the build of 3.889 million barrels the previous week.
- Angola Oil exports are set to pick up, with the company stepping up efforts to increase output from existing developments, Equinor reports. The company exports around 175,000 barrels per day, Bloomberg reports.
- Pemex stated that it shut down oil platforms and crude-exporting terminals in the Gulf of Mexico due to Hurricane Milton. The storm is approaching Florida’s west coast on Wednesday, where flooding and high winds are expected to inflict widespread damage and put lives at risk, Bloomberg reports.
Oil Technical Analysis: Nosediving another day
Crude Oil price has been purified from opportunistic traders that have been piling into the price action with bets on a further escalation in the Middle East. Several stop losses from traders have been filled, and some consolidation might be seen in the coming days. Expect some easing and sideways movement, with support being tested around $72.60.
Monday’s false break is to be ignored, as the move was fully paired back on Tuesday. It means that current pivotal levels on the upside are still valid: the red descending trendline in the chart below, and the 100-day Simple Moving Average (SMA) at $75.67 just hovering above it, makes that region very difficult to surpass. Once holding above there, the 200-day SMA at $77.16 should refute any further upticks as it did in early trading on Tuesday.
On the downside, old resistances have turned into supports. First is the 55-day SMA at $72.62, which acts as a potential first line of defence in case of any retreat. A bit further down, $71.46 (the February 5 low) comes into play as second support before looking back to the $70.00 big figure and $67.11 as ultimate support for traders to buy the dip.
US WTI Crude Oil: Daily Chart
Brent Crude Oil FAQs
Brent Crude Oil is a type of Crude Oil found in the North Sea that is used as a benchmark for international Oil prices. It is considered ‘light’ and ‘sweet’ because of its high gravity and low sulfur content, making it easier to refine into gasoline and other high-value products. Brent Crude Oil serves as a reference price for approximately two-thirds of the world's internationally traded Oil supplies. Its popularity rests on its availability and stability: the North Sea region has well-established infrastructure for Oil production and transportation, ensuring a reliable and consistent supply.
Like all assets supply and demand are the key drivers of Brent Crude 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 Brent 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 Brent Crude 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 Brent Crude 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 extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.