US Sanctions Weigh
Crude prices continue to reverse lower from the initial highs of the week printed on Monday as bearish sentiment builds midweek. Concerns over the impact of US sanctions on India for its continued purchasing of Russian oil are feeding into that bearish sentiment today after the US announced that it will double tariffs to 50%. Traders will now be watching to see if these bolstered US sanctions on India impact Russia oil inflows to the country given that so far India has continued undeterred.
Russia-Ukraine Conflict
Traders are also monitoring developments in the Russia -Ukraine peace process. For now, there are little signs of progress with news that fighting continues to intensify and Ukraine refuses to surrender any land to Russia. However, price action has become a little detached from this situation given the continued selling we’re seeing in crude. For now, the stronger US Dollar and trade war concerns look to be taking a more central role in driving market sentiment.
EIA Inventories Data
Finally, traders will today be watching the latest EIA crude inventories data. The group is expected to report a further drawdown of almost -2 million barrels, extending the 6-million-barrel drawdown of the prior week. If seen, this could help stem the selling for now while any upside surprise is likely to weigh further on crude here.
Technical Views
Crude
The recovery rally in crude off the August lows looks to have failed for now with price reversing back under the 63.83 level midweek. While below here, risks are skewed towards a deeper push down to the 57.42 level and YTD lows, in line with weakening momentum studies readings.
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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.