Crude Oil has been declining since March, when US WTI touched $130 briefly as the conflict in Ukraine started, but the slowing global economy and the
Crude Oil has been declining since March, when US WTI touched $130 briefly as the conflict in Ukraine started, but the slowing global economy and the excessive rate hike campaigns from all central banks around the world hurt the risk sentiment and sent the USD surging higher, so crude Oil has had two strong reasons to decline, despite the establishment wanting Oil higher, although G0ldman Sachs was predicting Oil to turn bullish even before the strong surge on Friday, so they might know something.
US crude fell to $75.75 by the end of September as the USD surged higher, but the Buck went through a strong retreat in early October which sent Oil higher, while on Friday we saw another surge which sent the price above the 100 SMA (green) on the daily chart, which has been acting as resistance.
US Oil Live Chart – Buyers Facing the October High at $92.60
The 100 SMA has been broken
The US just announced the final SPR tender of 15 million barrels and that will take a big chunk out of supply. The bigger risk is around Russia with the G7 still placing a price cap. Today physical oil trader Vitol said it expects Russian supplies to fall by 500k-1 million barrels per day in the winter. An EU ban begins on December 5 and orders for those cargos would already be cancelled. Goldman Sachs believes it will all add to prices. They have maintained a forecast of $115 brent in Q1 of next year and say risks are skewed higher.
Besides that, the Chinese government is giving strong signals that it wants to end the crazy covid zero policy, which improved the sentiment on Friday. Although, we still have to keep in mind that the Global economy is still heading into a recession and the FED will continue to hike for some more time.
WTI
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