Crude oil moved 2% up in the previous week, reaching a 2024 high. This was preceeded by U.S. and UK strikes on targets in Yemen, where Houthi militants have been harrasing Red Sea shipping lines.
In a note to investors Goldman Sachs said that “As the Middle East conflict is currently not affecting oil production, the geopolitical risk premium priced in oil prices now appears modest based on the implied volatility of options.”
Where do you think the price of WTI crude oil is headed next? Let us know in the comments and ask Daniela any questions you might have about oil trading.
00:00 Intro
WTI crude oil news update
WTI crude oil chart analysis
Recap
***
www.capital.com
Explore trading and start investing with Capital.com.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
This video is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.
Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.
Capital Com SV Investments Limited is regulated by Cyprus Securities and Exchange Commission (“CySEC”), under licence number 319/17.
Capital Com SV Investments Limited, company registration number: 354252. Registered address: 28 Octovriou 237 Lophitis Business Center II, 6th Floor, 3035, Limassol, Cyprus.
Oil prices have kicked off 2024 in a bearish pattern but with increased tensions in the Middle East let’s see how the commodity has been performing Lately hello and welcome back to our Channel my name is Daniela in today’s video we are going to be looking at oil prices just doing a quick recap of what’s happened over the last few days cuz not much has changed fundamentally but of course we do have those tensions
In the Middle East with now the attacks on Yemen increasing so before we get into it please like this video comment subscribe turn on your notifications and if you have any questions about the markets in general or training don’t forget to leave them down below and
We’ll try and get back to you as quickly as possible so as I was saying uh oil has started 2024 with a bearish formation it seems like demand pessimism is once again taking over we’ve got those concerns about weaker economic growth in the next 12 12 months that
Seem to be dominating the playing field now as I said we have seen escalation of attacks in the Middle East we’ve seen the US and Britain attack uh some areas in Yemen over the last uh two or three days and of course that is increased those concerns about wider escalation of
The conflict in the Middle East region so far the impact on oil prices has been limited we did see a spike higher on Friday as news of those attacks from Brit in the US made light um we saw about 4% gains on the back of the news
For oil prices both us crude and Brent but we quickly saw that momentum unw coming to to end the session pretty much unchanged as we’ll see in the chart in just a second as they said so far the impact on oil prices has been limited
Now of course the uh tax uh in the Red Sea have uh LED were the main reason for the US and Britain to get involved now the attacks on the Red Sea come on the back of course of Israel’s attack on Gaza on Hamas um now the retaliation
Effort seems to be continuing we have seen these uh Yemen Rebels actually come out and say that they expect all for Europe and for the US and Britain to expect retaliation from these attacks we have seen the Us carry out more attacks on Sunday of course news of that coming
And uh supporting oil prices but we just haven’t seen that pick up uh in the risk premiums that you would expect from the escalation of tensions as I said the impact so far limited because the attacks on the Red Sea have caused some tankers and some vessels to divert and
Go via South Africa uh to get to Europe and of course that puts uh time added time costs um to the uh cargo but we really haven’t seen an impact on the cargo itself yet we do still have that flow of oil coming um from the Middle
East region towards Europe so so far the impact has been limited although if we do see it move more to the Arabian Peninsula we do expect to see more retaliation um for Iran and Saudi Arabia to start to get involved that is when we could see the greatest impact on oil
Prices so nonetheless so far they said the impact has been minimal but it does put a short-term flaw under oil prices we are seeing that gives them some little bit of momentum but the fact that we are seeing weakness in oil prices even though uh these concerns remain
Does allude to the fact that the market seems to be struggling to come to terms with that bullish pattern in oil prices seeing the reversal it’s uh expected that throughout 2024 we’re going to see prices hovering around current levels consolidating as we saw we see normalization and in fact we’ve seen a
Few invest Banks coming out in the last few days Barkley and City being uh two of the ones that have come out and actually reduced their price forecast for both Brent and uh WTI for the year basically citing uh the fact that we started the year with higher than
Expected inventory levels and also the risk of looser uh cooperation between OPEC Plus members to uh normalize the uh the excess capacity uh to normalize is the uh spare production capacity given that the cuts from 2023 to supply have been extended to this year so all in all
We do have this bearish pattern uh continuing it looks like oil prices are going to struggle to find any reason to push higher unless we see these concerns about conflict in the Middle East increase um so let’s jump onto the chart now to see how it’s been
Trading okay as you can see here on on the uh West Texas intermediate WTI chart uh the struggle that we’ve seen to build those gains higher and reverse that bearish momentum the RSI is a good example of that you can see since the beginning of the year we struggled to
Push above that midline that 50 line um struggling to reverse that bearish momentum and to consolidate higher there have been some good attempts in in that time we have seen those uh daily gains uh for WTI but they’ve been quickly reversed lower um and the momentum the the feeling is that that bearish
Momentum continues to have the upper hand now you can see here on Friday session after news about the uh attacks on Yemen broke we saw that strong positive momentum here for us crude prices up around 4% but uh you can see coming to end of the day lower um there
From the open and also leaning into bearish momentum today on Monday so again even after having a catalyst or a reason to build those prices higher we’re just struggling to see that follow through in prices now we know the $75 Mark has been a key resistance for WTI
The pass of course on uh Friday that once again evidencing it but we’ve also got the moving averages stacked against price here on the upper bound we’ve got the 50200 and 100 day so it’s showing that even if we do have that shortterm bounce to break those resistan up ahead
There is a lot uh to watch out for in terms of barriers as the uh price moves it higher so all in all is getting that feeling that price is likely to consolidate from here just really struggling to find that bullish momentum but also on the down side we do have
That support on the back of the escalations in the Middle East as I was saying this ascending trend line here from the beginning of the year actually shows that since then we’ve had higher lows which is actually a positive sign a positive signal for that short-term momentum but we’re struggling to take it
Anywhere to see that follow through and that of course is leading to a little bit of indecision so we’ve got that longer term descending trend line from the highs back here in September that has been slowly uh lowering those Highs but also that shortterm uh ascending
Trend line which is coming now to kind of an area of a funnel here where we have that play of power to see which momentum dominates as I said expected to see throughout most of 2024 just a consolidation around current prices as say between 70 and $80 per barrel for us
Crude but of course the uh tension in the M EAS could provide some further momentum but realistically we’re thinking about it fundamentally uh both the supply and demand side are pointing lower for prices for oil prices so right now now the short-term floor is pretty much being provided by those tensions in the
East Middle East and how that can affect oil prices in the future so not really uh any clear Direction right now the RSI bang in the middle here so a clear picture of indecision it’s just a case of who’s going to have the upper hand
And what is going to be the next news or Catalyst uh to provide a direction for oil prices that is it for today’s analysis on oil prices thank you so much for watching and don’t forget to subscribe to our Channel
5 Comments
Oil can touch 78 this week
Thanks
👍
Happy new year
Oil and gas 😮