Brent Bid on Possible Reduction in China’s COVID Policies, API & FOMC


BRENT CRUDE OIL (LCOc1) TALKING POINTS

  • Unverified change in Chinese policy lifts brent crude outlook.
  • US stockpiles show marked decline.
  • Emerging bullish crossover a precursor to higher prices?

Trade Smarter – Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

BRENT CRUDE OIL FUNDAMENTAL BACKDROP

Brent crude oil received a significant lift as we enter November after a surprise miss on the API crude oil weekly stock report yesterday (see economic calendar below). The data showed a decline in inventories by 6.53m barrels per day against a projected increase of 0.267m barrels per day. The EIA release later this evening shows a similar increase estimate with another disappointing print likely extending brent price appreciation.

Source: DailyFX economic calendar

Brent prices gained further traction this morning on the back of unconfirmed news that China may look to ease their ‘zero tolerance’ COVID-19 rules that have plagued the economy as well as contributing to demand destruction limiting upside on global commodities including brent crude.

image2.png

Source: DailyFX economic calendar

From a dollar perspective, and the focus for today is the Fed’s interest rate decision. Money market are pricing in a 75bps incremental hike with a high degree of probability (98.4%) but markets will shift their attention to the post-announcement press conference. Forward guidance will likely be delivered from this platform and with much talk around a Fed ‘pivot’, any dovish slant to the speech could see the dollar decline giving brent some support.

Recommended by Warren Venketas

Get Your Free Oil Forecast

FEDERAL RESERVE INTEREST RATE PROBABILITIES

image3.png

Source: Refinitiv

TECHNICAL ANALYSIS

BRENT CRUDE (LCOc1) DAILY CHART -UNDATED

image4.png

Chart prepared by Warren Venketas, IG

Brent crude daily price action could be preparing for another move higher should the developing EMA bullish crossover (yellow) unfold as expected but with the upcoming FOMC meet, short-term directional bias could be determined by the outcome of the announcement.

Key resistance levels:

  • 95.20/100-day EMA (yellow)
  • 20-day EMA (purple)/50-day EMA (blue)

Key support levels:

IG CLIENT SENTIMENT: BULLISH

IGCS shows retail traders are NET LONG on crude oil, with 58% of traders currently holding short positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment but recent changes in long and short positioning result in a short-term upside bias.

Contact and followWarrenon Twitter:@WVenketas





Source link

Related articles

Subsequent-gen is now as first Snapdragon 8 Elite Gen 5 telephones launch

TL;DR Xiaomi has launched the Xiaomi 17, Xiaomi 17 Professional, and Xiaomi 17 Professional Max. These are the primary Snapdragon 8 Elite Gen 5 telephones, whereas additionally providing gigantic batteries. The Professional telephones even have secondary...

Bitcoin treasury firms threat additional 55% inventory value declines

Bitcoin (BTC) treasury firms that raised capital by way of PIPE (non-public funding in public fairness) offers face mounting stress as share costs gravitate towards their discounted issuance ranges, creating potential losses...

iOS Widget for Stay Tickers

For months I've been attempting to get the primary 6 NG tickers on my homescreen for straightforward viewing. I lastly discovered a free app with a watchlist...

Enterprise Merchandise Companions: An Undervalued Excessive-Yield MLP For An Overpriced Market

It is a visitor contribution by Tom Hutchinson, Chief Analyst, Cabot Dividend Investor The market simply retains on going. Each the S&P 500 and the Nasdaq made one more new excessive this week. The S&P...

Numerous nice chargers are already on sale forward of October Prime Day

Amazon’s October Prime Day occasion (often known as Prime Large Deal Days) doesn’t formally begin till October seventh, however that doesn’t imply you need to wait to discover a whole lot on charging...
spot_img

Latest articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

WP2Social Auto Publish Powered By : XYZScripts.com