Crude Oil has seen a significant increase, with prices rising by over 1.50% for the second consecutive day after a substantial gain on Wednesday. This surge has been attributed to concerns related to tropical storm Francine impacting US production, along with skepticism regarding the recent OPEC report’s outlook on Oil demand. Additionally, the US Dollar Index (DXY) is showing strength, trading above 101.50 and testing the upper boundary of its bandwidth. This increase in the US Dollar came after data on the US Consumer Price Index revealed a surprise uptick, reducing expectations for a 50-basis-point rate cut from the US Federal Reserve.
The International Energy Agency (IEA) released a report indicating a 70,000 barrels per day decline in OPEC’s daily output due to issues in Libya, along with steady supply from Gulf producers such as Saudi Arabia and Iraq. Moreover, the US faces challenges as tropical storm Francine hits Louisiana, causing the evacuation of oil and gas companies from offshore platforms in the Gulf of Mexico. In terms of technical analysis, Crude Oil prices are anticipated to be volatile, with the potential for more downside than a rebound. Key levels to watch include $67.11, $70.00, and $71.46, with a return to $75.27 depending on various factors.
WTI Oil, or West Texas Intermediate Crude Oil, is a high-quality oil sourced in the United States and considered a benchmark for the global Oil market. It is easily refined and distributed via the Cushing hub, influencing market prices. Factors such as global growth, political instability, and OPEC decisions affect the price of WTI Oil. Weekly inventory reports from API and EIA also play a crucial role in determining whether Oil prices go up or down based on supply and demand data. OPEC, a group of 13 Oil-producing nations, sets production quotas that impact WTI prices, while OPEC+ includes additional non-OPEC members like Russia.
In conclusion, the recent increase in Crude Oil prices is attributed to concerns over tropical storm Francine impacting US production and skepticism regarding the OPEC report on Oil demand. The US Dollar Index is also showing strength, potentially reducing expectations for a rate cut by the US Federal Reserve. Additionally, the IEA report highlighted a decline in OPEC’s daily output due to issues in Libya, while the US is dealing with the impact of tropical storm Francine on oil and gas installations. Technical analysis suggests potential volatility in Crude Oil prices, with key levels to watch for in the coming days. Overall, factors such as global growth, political instability, and OPEC decisions will continue to play a significant role in determining the price of WTI Oil in the international market.
