Crude Selling Stalls For Now
Conflicting Signals
Oil prices remain heavily weaker against the recent highs but selling momentum seen through the end of last week/early this week has dried up for now. Traders are dealing with conflicting signals around the Iran war with Trump on the one hand signalling hopes for the conflict with Iran to end soon, while also continuing attacks and reaffirming his commitment to maintaining a naval blockade against Iran.
US Midterms Impact
Oil prices fell sharply on the back of the US midterms result with traders eyeing the Democrat win as increasing the prospect of a Trump being forced into ending the conflict. Early headlines on the back of the elections supported this view with Trump expressing optimism over negotiations and a willingness to soon conclude the war. However, ongoing military action and Iran’s dismissal of US/Iran negotiations have left traders somewhat confused and the risks of the conflict continuing into next year remain hard to ignore.
Rising OPEC+ Output
Away from the Middle East, oil prices have also been pressured this week by news of rising OPEC+ output. A Reuters survey shows that output from the cartel and its producer-allies rose by around 1.4 million barrels a day in October, back up to around 90% of the pre-US/Iran war level.
Technical Views
Crude prices have broken below the 87.55 level and, while below here, are now vulnerable to a deeper push down towards the 77.65 level next. If bulls can reclaim the 87.55 handle, a recovery move above 95.06 is needed quickly to help alleviate downside risks.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.