Oil Prices Retreat After Surging Above $77, Analysts Concerned About Supply Disruption in Libya
Oil traders are taking profits on Tuesday as prices retreat from a steep three-day surge, reaching a pivotal technical area near $77.60. The sudden disruption in Libyan Oil production due to a local political spat is causing concerns among analysts. Libya’s supply outage, particularly of Light Sweet Crude, is challenging to replace and in high demand for gasoline and kerosene production.
The US Dollar Index (DXY) is also experiencing profit-taking after a brief recovery, with markets anticipating substantial interest-rate cuts from the US Federal Reserve. However, strong incoming US data could potentially impact future rate cuts if the economy overheats.
Currently, Crude Oil (WTI) is trading at $76.48, and Brent Crude at $79.21.
Key Market News: Impact of Libya’s Oil Outage on Refiners
- Analysts are warning of significant issues following the shutdown of Libyan Oil fields, which produce Light Sweet Crude in high demand.
- Chinese Crude refiners are facing reduced demand due to the growing popularity of Electric Vehicles (EVs) in China, adding to existing challenges in the manufacturing and construction sectors.
- Goldman Sachs has lowered its Brent forecast to $77.00 per barrel by 2025, amid expectations of OPEC reversing voluntary supply cuts.
- The American Petroleum Institute will release its weekly crude Oil stock numbers, with analysts predicting a drawdown of 3 million barrels.
Technical Analysis: Oil Faces Resistance Near $77.60
Oil prices are approaching a critical technical level near $77.60, with multiple resistance points ahead towards $79.00. The downward revisions from major financial institutions suggest a potential end to the recent rally. Key support levels include $71.17, $70.00, $68.00, and $67.11.
Brent Crude Oil FAQs
Brent Crude Oil is a benchmark for international Oil prices, known for its high quality and low sulfur content. Global factors such as supply and demand, political instability, OPEC decisions, and the value of the US Dollar influence Brent Crude Oil prices. Weekly Oil inventory reports and OPEC production quotas also impact market trends.