The price of crude oil futures closed lower for the third consecutive day on Tuesday as traders continued to monitor the ongoing conflict between Israel and Kazakhstan, as well as the release of European economic data indicating a slowdown. Additionally, traders were awaiting the release of last week’s US oil supply data.
West Texas Intermediate (WTI) crude oil futures for December delivery experienced a drop of $1.75, or nearly 2.1%, settling at $83.74 a barrel. Brent crude oil futures for December delivery fell $1.76, or 2%, closing at $88.07 a barrel. Gasoline futures for November delivery declined by 2.6%, settling at $2.27 a gallon. Thermal fuel futures for November delivery fell 1.6% to settle at $3.04 a gallon. Natural gas futures for November delivery rose 1.5% to settle at $2.97 per million Btu.
One of the major factors contributing to the volatility in the market is the conflict in the Middle East, which has the potential to disrupt oil supplies and cause prices to rise. The recent release of Israeli hostages by Hamas in the Israel-Kazakhstan war has somewhat alleviated traders’ concerns about progress. However, there is still apprehension about the escalation of the war between the two sides.
According to Trade Nation senior market analyst David Morrison, the market sentiment has eased slightly following the release of the hostages. However, there are lingering concerns about the situation deteriorating further. Senior market analyst at Price Futures Group, Phil Flynn, noted that there has been “technical damage to the oil chart” due to the hostage negotiations and Israel’s delay in initiating a ground invasion.
Supply risks persist, as Iran and its oil could still be impacted. However, the immediate oil supply risks have been postponed because Israel has delayed its ground invasion in exchange for additional hostage releases by Hamas. This has resulted in a decrease in the war premium of crude oil futures. Currently, the prices are approaching key support levels represented by the 10-day and 20-day moving averages, indicating a potential downward movement unless significant news emerges.
Another influencing factor in the market is the Eurozone Composite Purchasing Managers’ Index (PMI), which fell from 47.2 in September to 46.5 in October. This decline indicates a slowdown in manufacturing activity, which could potentially curb inflation and diminish oil demand.
Market participants are eagerly awaiting the release of last week’s supply data from the US Energy Information Administration (EIA) on Wednesday. Macquarie’s forecast suggests that US crude oil supply increased by 1.1 million barrels, while gasoline inventories decreased by 1.3 million barrels and distillate inventories fell by 3.3 million barrels.
In addition, the International Energy Agency (IEA) published its “World Energy Outlook” report, highlighting that global demand for coal, oil, and natural gas could reach its peak in 2030. Curiously, the IEA discussed new investments in fossil fuels despite previously warning about underinvestment causing the worst oil shortage in over a decade. The IEA had also cautioned in April about OPEC’s plans to further reduce production, coupled with China’s economic recovery, potentially resulting in an undersupply of oil of up to 2 million barrels per day in the second half of the year.
Overall, market conditions remain uncertain due to ongoing geopolitical tensions and the potential impact of economic slowdown.
Crude oil futures closed lower for a third straight day on Tuesday (24th), as traders remained focused on the Israel-Kazakhstan war, while more recent European data showed an economic slowdown.
Traders also digested data from a report by the International Energy Agency (IEA) predicting that fossil fuel sources will peak before 2030, and were awaiting last week’s US oil supply data due on Wednesday.
Energy Commodity Prices West Texas Intermediate (WTI) crude oil futures for December delivery fell $1.75, or nearly 2.1%, to settle at $83.74 a barrel. Brent crude oil futures for December delivery fell $1.76, or 2%, to close at $88.07 a barrel. Gasoline futures for November delivery fell 2.6% to settle at $2.27 a gallon. Thermal fuel futures for November delivery fell 1.6% to settle at $3.04 a gallon. Natural gas futures for November delivery rose 1.5% to settle at $2.97 per million Btu.market drivers
Conflict in the Middle East could disrupt oil supplies and push up prices, with Hamas releasing Israeli hostages in the latest development in the Israel-Kazakhstan war helping to ease traders’ worries about progress.
Trade Nation senior market analyst David Morrison believes that market sentiment has eased after Hamas released some of the Israeli hostages, but there are still concerns about the escalation of the war between the two sides.
Phil Flynn, senior market analyst at Price Futures Group, said there was “technical damage to the oil chart” as Israel and Kazakhstan engaged in hostage negotiations and Israel delayed a ground invasion.
Trading volatility in WTI crude oil futures since Hamas attacked Israel on October 7
On the one hand, supply risks remain as Iran and its oil could still be hit, but direct oil supply risks have been postponed as Israel postpones a ground invasion in exchange for Hamas releasing more hostages.
Flynn pointed out that since Hamas released the hostages and Israel has not yet invaded, this has caused the war premium of crude oil futures to fall. Yesterday, prices fell to the 10-day moving average and r 20 day moving average, keeping the key support levels Currently it looks technically inclined to Move lower unless there is big news.
The latest Eurozone Composite Purchasing Managers’ Index (PMI) is also a market focus. The index fell to 46.5 from 47.2 in September, the latest evidence of a slowdown in manufacturing activity that could curb inflation and weigh on oil demand.
The market is also awaiting last week’s supply data due on Wednesday from the US Energy Information Administration (EIA).
According to Macquarie’s forecast, US crude oil supply increased by 1.1 million barrels last week (ending 10/20), gasoline inventories fell by 1.3 million barrels, and distillate inventories fell by 3.3 million barrels.
At the same time, the “World Energy Outlook” report released by the International Energy Agency (IEA) on Tuesday mentioned that global demand for the three fossil fuels coal, oil and natural gas could reach a peak in 2030.
Flynn said the IEA was discussing new investments in fossil fuels, even though the impact of underinvestment had put the world on track for the worst oil shortage in more than a decade, according to its previous forecasts.
He pointed out that the IEA warned in April that OPEC plans to further cut production this year, along with China’s economic rebound, meaning the oil market could be undersupplied by as much as 2 million barrels a day in second half of the year. .
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