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WTI Crude Oil Is Stuck in a Choppy Trading Range

Commodities / Crude Oil Oct 23, 2022 - 10:01 PM GMT

By: Submissions

Commodities

Oil prices ended the week caught between the headwinds of a tighter global supply and a lacklustre economic outlook eroding consumers' purchasing power.

Macroeconomics

On Thursday, the greenback took off over the value of 150 Japanese yen – a symbolic price mark – for the first time since the 1990s.




A strong dollar reduces foreign investors' purchasing power in other currencies and thus demand. Therefore, the Fed reinforced expectations that the central bank could raise rates aggressively early next month, which should contribute to a significant slowdown in activity and demand. As for inflation, it barely fell in the United States in September over one year, to 8.2% against 8.3% in August.



U.S. Dollar Currency Index (DXY), daily chart

Fundamental Analysis

Crude prices have oscillated between losses and gains this week as concerns over the global economic slowdown clash with caution over tighter supply. The market seems to be receiving mixed signals now, with falling US oil inventories indicating increased demand in the country, while weak economic signals are having an adverse impact (on prices).

U.S. Crude Oil Inventories

On Wednesday, the Energy Information Administration's (EIA) released the weekly change in crude oil stocks, showing a drop of 1.725M barrels, while the forecasted figure predicted 1.380M barrels in excess.





(Source: Investing.com)

Geopolitics

Belarus could take further steps towards direct involvement in the war in Ukraine, As food corridor talks continue between representatives from the United Nations and Russia in order to maintain an agreement on the departure of ships from Ukrainian ports. A "hidden mobilization" would be underway after the announcement of the creation of a joint military group between Russia and Belarus, according to the independent Belarusian newspaper "Nacha Niva". So far, the Belarusian army has not participated in the fighting on Ukrainian territory. Since the beginning of the conflict in Ukraine, Belarus has served as a logistics platform for its Russian ally.

Technical Charts



WTI Crude Oil (CLZ22) Futures (December contract, daily chart)



RBOB Gasoline (RBZ22) Futures (December contract, daily chart)



Brent Crude Oil (BRNZ22) Futures (December contract, daily chart) – Contract for Difference (CFD) UKOIL

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Thank you.
Sebastien Bischeri

Oil & Gas Trading Strategist
* * * * *
The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


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