Crude Slides Further
Crude prices are continuing to move lower midweek with the futures market now down more than 11% on the month. The move lower comes despite a fresh downturn in USD and shows that growing optimism over a potential Russia-Ukraine peace deal is now taking centre stage as a key market driver. Trump and Putin are due to meet on Friday and traders are hopeful that the meeting can lay the groundwork for peace ahead of Trump meeting with Zelensky next week.
Russia-Ukraine Peace Talks
If the talks go well and headlines are positive on the back of the meeting, crude prices are likely to slide further as traders adjust their supply forecasts. War in that region remains a key threat to distribution and sanctions on Russia oil have caused significant tightness in the global market. As such, the prospect of Russia crude returning to the market (even if not immediately), should put fresh pressure on crude prices near-term. If talks fail on Friday, however, and a peace deal looks unlikely near-term, this could fuel a sharp short-squeeze in crude with prices vulnerable to a quick spike higher as traders reassess the supply outlook.
EIA Data Due
Looking ahead today, focus will be on the latest EIA inventories update. The group is forecast to report a 1million barrel drawdown, extending the drawdown from the prior week’s 3-million-barrel decline. Given the bigger focus on Russia peace talks, today’s data is unlikely to impact price action much unless we see a big surprise on either side of the market.
Technical Views
Crude
The sell off in crude has seen the market breaking down below the rising trend line from YTD lows and below the 63.83 support level. With momentum studies bearish, focus is on a continuation lower while below this point with 57.42 the next target for bears.
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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.