Hurricane Fears Receding
Crude prices remain under pressure across early European trading on Tuesday with crude futures continuing to pull away from last week’s highs. The main driver behind the move is the shift in concern around Hurricane Beryl. Crude prices had been higher on the expectation of severe supply disruption. With the weather system having been downgraded to a tropical storm and altering course slightly, it looks as though the majority of the feared disruption to supply will be avoided. Crude prices had been higher on the expectation of severe supply disruption.
Middle East Impact
The latest news regarding the Israel-Hamas war is also helping oil prices cool off here. Reports that Hamas has given initial approval to a US-backed ceasefire deal has raised hopes that a cessation to violence will be agreed soon. While nothing has been confirmed yet and negotiations remain precarious, any encouraging news whatsoever is likely to add to bearishness in crude.
USD Focus
The move lower in crude over recent days comes despite a sharp pullback in the US Dollar. The greenback has slipped from highs on the back of a string of weaker-than-forecast US economic data. A better-than-forecast NFP on Friday did little to help fuel a recovery with the Dollar lower in response to a rising unemployment rate and weaker jobs growth. All eyes are now on US inflation on Thursday with comments from Fed chairman Powell due today and tomorrow. If we see a weaker US Dollar through dovish comments from Powell and weaker US CPI this should help crude prices stabilise near-term.
Technical Views
Crude
The rally in crude has stalled for now into the retest of the underside of the broken bull channel and a test of the bear trend line from 2023 highs. Price is now turning back below the 82.59 level and with momentum studies falling, focus is on a continuation lower with 77.64 the next support level to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.