Oil prices have experienced a drop in recent weeks but a closer look at the oil chart does show there is some potential for a rebound. U.S. jobs data came in a day ago and although it showed a bit of increase, it did come after weak manufacturing data. So demand should be dropping in the coming quarters and the oil price should fall? Watch our analysis to see if this has already been priced in and what the crucial levels to watch are for next month.
The crude oil price also reacted to the quick resumption of supply from Saudi Arabia. They are now back to their usual 5% of global output.
But it’s the macro data that’s impacting the oil chart with the strongest force right now. A recession seems even more likely now due to what appears to be slowing economic growth that could even turn into a contraction. Every oil price forecast is being adjusted for this and almost all models assume either a slowdown or even worse.
It seems the oil price in October 2019 will be governed by economic fears. But geopolitical circumstances are also something that could influence it in both directions. The continued tension between the U.S. + Saudi camp and Iran could see further escalation of rhetoric and actions and a prudent oil price analysis should have it in mind. Any disruption of supply, be it with infrastructure attacks or targeting tankers could cause sharp moves on the oil price chart.
Last (and probably of least importance right now) is the seventh consecutive week of less rigs in operation by U.S. energy companies. This important but at this point it just confirms something the market is aware of and is something our oil chart analysis has taken this into consideration.
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