Fading Russia-Ukraine Peace Hopes
Oil prices are looking a touch softer today following the move yesterday back above the 63.83 level. Crude futures have recovered off lows over the last week bolstered in part by receding expectations of a near-term peace deal between Russia and Ukraine. Intensified Russian attacks on Ukraine as well as Ukrainian insistence that it will not surrender any land, mean that the prospect of a peace deal being announced in the near-future look dim. As a result, supply disruptions remain a key driver for the market and the prospect of Russian supply returning to the broader market remains far-off. Traders will continue to monitor incoming headlines around Russia-Ukraine talks with any positive headlines likely to weigh on crude and any negative headlines likely to drive fresh buying.
USD & The Fed
Away from the Russian-Ukraine war, traders will also be keeping an eye on USD and any shifts in the market’s Fed outlook. USD is rebounding for now following a break lower last week in response to dovishness from Fed chair Powell. Any fresh USD weakness should help support crude prices again. However, if the current USD rebounds gathers pace, this could cap the rally in crude for now. Incoming US data throughout the remainder of the week will now be in focus with USD likely to respond sharply to any significant data surprises and/or Fed comments.
Technical Views
Crude
For now, the market is attempting to get back above the 63.83 and hold. If price can stay atop this level, focus will be on a test of 67.45 next. However, back below there, 57.42 starts to beckon as the next downside target. Momentum studies are tentatively bullish for now, suggesting downside risks remain despite the push higher yesterday.
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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.