oil WTI

Oil prices have been very range-bound over the past few months but breakout potential remains as WTI has built an ascending triangle inside of the recent range.

Thanksgiving in the US has made for a very quiet second half to the week for traders, but with a key US inflation report and an OPEC meeting on tap then volatility is expected to return next week. Also note that Australia releases inflation figures which could be the deciding factor as to whether the RBA hold or hike at their final meeting of the year.

The rapid decline of oil prices last week has seen calls for $100 WTI come into question. But with prices showing signs of stability above $80 on Friday and Iran declaring war on Palestine, oil prices will be closely watched due to concerns of a supply disruption potentially on the horizon.

The combination of softer US economic data and yields pulling back from their highs allowed risk assets to sigh in relief and lift themselves cautiously from their cycle lows. Although oil prices plunged at the prospects of a struggling consumer due to low gasoline demand, sending WTI crude oil 5.5% lower during its worst day this year.

WTI crude has risen to $91.65 per barrel (bbl) at time of writing, with a $93.44 high Brent crude oil has risen to $94.58 per barrel (bbl) at time of writing, with a $95.66 high The US dollar index has risen to 105.2 with strong momentum

WTI crude oil prices rose for a fourth consecutive week despite a recovery of the US dollar. Whilst it shows the potential to pull back from the $77 highs, short-covering of large speculators and managed funds over the past couple of weeks suggests it could be headed towards $80.

USD/JPY falls ahead of debt ceiling talks. Oil edges lower after Chines trade data, US CPI in focus.

US futures and Asian indices partially handed back some of yesterday’s gains and oil touched a 1-month low as yesterday’s optimism shows early signs of petering out.

WTI managed to trade back above $79 during quiet trade overnight, and price action suggests bulls are trying to carve out a swing low.

Slightly higher consumer confidence and upwardly revised growth in the US was enough to put another spring into bullish steps on Wall Street, ahead of the holidays.

The United Kingdom has recorded the first known Omicron-related death, as the World Health Organisation warns that variant could pose as a global risk.

After a lull in the calendar we have several data sets to complete the week, with US inflation being the main event.

An article in the Financial Times triggered a fresh round of selling before the European open, as Moderna’s CEO predicts vaccines will be less effective.

To say markets were volatile on Friday would be quite an understatement. So today is about whether the selling will continue, or whether volatility will pause for breath.

Volatility for crude oil has increased since it met resistance at $85, but we think a swing low has now been set just below $80 over the near-term.

The FTSE posted a solid close yesterday and keeps a long-term reversal in play, whilst oil prices saw sharp reversal at key resistance levels following strong inflation data.

Oil slips below $80 on slowing growth concerns, bullish trend remains intact for now.