Crude Oil Faces Setback Amid Stronger US Dollar
- Crude Oil sees its 5% weekly gain evaporate partially under the weight of a stronger US Dollar this Friday.
- Russia has put a Polish military base on top of its target list for the next retaliation.
- The US Dollar Index broke a fresh two-year high and gears up for November’s US PMI release.
Crude Oil prices are experiencing a dip due to a stronger US Dollar, causing a setback for commodities overall. This decline comes amidst heightened tensions between Russia and Ukraine, with both countries vying for tactical advantage ahead of potential resolution talks once President-elect Donald Trump assumes office in January 2025. Notably, Russia has identified a Polish military base, a NATO member, as a target for retaliation in response to any future attacks from Ukraine, as reported by Yahoo News.
Meanwhile, the US Dollar Index (DXY) has surged following disappointing European preliminary Purchasing Managers Index (PMI) data for November, indicating contraction in business activity in the Eurozone. This has further bolstered the strength of the US Dollar, with expectations of additional inflows pending the release of US PMI numbers later on Friday.
Currently, Crude Oil (WTI) is trading at $69.89, while Brent Crude is priced at $73.58.
Oil News and Market Updates
- In escalating tensions between Russia and Ukraine, Russia has expanded its list of targets to include a Polish military base for potential retaliation.
- Russian President Vladimir Putin is scheduled to convene a security meeting later on Friday, with the agenda yet to be disclosed.
- OPEC+ delegates anticipate that the upcoming meeting on Oil production restoration plans will be conducted online on December 1, deviating from the original in-person format in Vienna.
- Expectations point towards a delay in further production revival plans by OPEC+ until the second quarter of 2025, as reported by Bloomberg.
- The weekly Baker Hughes US Oil Rig Count is set to be released at 18:00 GMT, following the previous count of 478 operational rigs.
Oil Technical Analysis
Despite Crude Oil’s nearly 5% gain this week, traders are questioning the potential for further upside in this tension-driven market. Analysts suggest that recent movements may signify the final steps before any negotiations, as both countries strategize for optimal bargaining positions.
Key technical levels to watch include:
- 55-day Simple Moving Average (SMA) at $70.13
- 100-day SMA at $72.77
- 200-day SMA at $76.45
Support levels:
- $67.12
- $64.75 (2024 year-to-date low)
- $64.38 (low from 2023)
WTI Oil FAQs
For those seeking more information on WTI Oil, here are some frequently asked questions:
- WTI stands for West Texas Intermediate, a type of Crude Oil known for its quality and ease of refinement.
- Factors influencing WTI Oil price include supply and demand, global growth, political instability, and OPEC decisions.
- Weekly Oil inventory reports from API and EIA impact WTI Oil prices, reflecting changes in supply and demand.
- OPEC’s production decisions play a significant role in determining WTI Oil prices, with OPEC+ including additional non-OPEC members like Russia.