Crude Oil prices have been experiencing gains on Thursday as they move away from the $70.00 mark and look for further upside potential. This increase comes as a result of escalating geopolitical tensions following failed attempts by US Secretary of State Antony Blinken to broker diplomatic deals in the Middle East. The failure of Blinken’s visit has raised concerns about potential further escalations in the region. The US Dollar Index has also faded after a steep rally earlier in the week, with market focus shifting to the US Purchase Managers Index (PMI) reading for October.
The US Dollar Index (DXY) has been facing downward pressure on Thursday, with traders awaiting the preliminary US PMI reading for October. The index had experienced a strong rally earlier in the week, breaking through key levels above 104.00. With less than two weeks remaining until the US presidential election, expectations are that the US Dollar will continue to face downward pressure, potentially leading to further gains in Crude Oil prices.
At the time of writing, Crude Oil (WTI) is trading at $71.06 per barrel and Brent Crude at $74.92 per barrel. Meanwhile, market movements have also been influenced by ExxonMobil’s sale of its onshore Oil and Gas assets in Nigeria for $1.3 billion and reports of Mexican state-owned Oil company PEMEX boosting its Gas and Oil reserves during President Claudia Sheinbaum’s term.
On the technical side, Crude Oil prices have been recovering on Thursday and are expected to continue gaining ground towards the $75.00 mark. The recent focus on the US presidential election has been replaced by renewed attention on geopolitical tensions in the Middle East, with traders anticipating potential escalations. The current price of Crude Oil is above the 55-day Simple Moving Average (SMA) and is approaching a key technical level at $75.08, which could serve as a major hurdle.
WTI Oil, also known as West Texas Intermediate, is considered a high-quality Crude Oil that is easily refined and distributed via the Cushing hub in the United States. Its price is influenced by factors such as global demand, political instability, and decisions made by OPEC. Changes in weekly Oil inventories, reported by the API and EIA, also impact the price of WTI Oil. Additionally, decisions made by OPEC and OPEC+ can impact production quotas and therefore influence WTI Oil prices.
In conclusion, Crude Oil prices have been on the rise on Thursday as geopolitical tensions in the Middle East continue to escalate. The failed diplomatic efforts by US Secretary of State Antony Blinken have raised concerns about potential further escalations, leading to increased market volatility. With the US Dollar Index facing downward pressure and traders awaiting key economic data, the focus remains on the potential impact of these factors on Crude Oil prices in the days ahead.
