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The Wildcard For Oil Markets Next Week

U.S. West Texas Intermediate crude oil futures are up late in the session on Thursday but off its intraday high. Prices have been supported throughout the session by a weaker U.S. Dollar, tight U.S. supply and hopes for improved fuel demand in China after COVID-19 curbs were eased in two major cities.

The prospect of a lower price cap on Russian oil is also lending support, analysts said. European Union governments tentatively agreed on Thursday on a $60 cap on Russian sea-borne oil, an EU diplomat said.

The wildcard is OPEC+, which holds a virtual meeting on Dec. 4 to discuss policy.

Technically, January WTI crude oil futures are in a position to post a potentially bullish closing price reversal bottom. This won’t change the trend to up, but if confirmed next week, it could trigger the start of a 2 to 3 week counter-trend rally.

US Dollar Hits Four-Month Low

The U.S. Dollar dipped to 16-week lows against a basket of major currencies on Thursday after data showed that U.S. consumer spending increased solidly in October, while inflation moderated, adding to expectations that the Federal Reserve is closer to reaching a peak in interest rates.

A weaker greenback tends to increase foreign demand for dollar-denominated crude oil.

China Eases Zero-COVID Strategy

Optimism over Chinese oil demand recovery was lifted on Wednesday when the cities of Guangzhou and Chongqing announced the easing of COVID curbs. This took place a day…


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Leave a comment
  • Oleksandr Zalesky on December 02 2022 said:
    "The direction of the January WTI crude oil market the week-ending December 9 is likely to be determined by trader reaction to $76.28."
    Can anyone explain me why? Because due to fundamentals i can not undestand why traders would react to $76.28.

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