News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • (ASEAN Fundy) US Dollar Forecast: Turning Point Reached? USD/SGD, USD/THB, USD/IDR, USD/PHP #USD $USDGSD $USDTHB $USDIDR $USDPHP https://www.dailyfx.com/forex/fundamental/article/special_report/2021/10/25/US-Dollar-Forecast-Turning-Point-Reached-USDSGD-USDTHB-USDIDR-USDPHP.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/87N97EGWdr
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/N2GqH7QoOd
  • RT @mkraju: Manchin signaling he’s open to $1.75T for social safety net bill, per source briefed on matter, but it’s unclear where the pric…
  • Further your forex knowledge and gain insights from our expert analysts @JohnKicklighter and @JStanleyFX on $USD with our free Q4 market analysis guide, available for free today. https://t.co/7G7pWntiyY #DailyFXGuides https://t.co/XYCRng3hEW
  • RT @JournalistRoss: From CNN's @mkraju: The goal among Democratic leaders is to have a vote Wednesday or Thursday on the infrastructure pac…
  • *Reminder: Weekly Strategy Webinar tomorrow at 8:30am ET on @DailyFX !! https://t.co/lxd5fZnn4H
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/L15w1dzclc
  • Wow Liverpool... https://t.co/9Mx6Xmw4iS
  • With the $SPX, Bitcoin and Fed 2022 rate forecasts pushing record highs; the heavy economic docket for the coming week will make for some loaded trading potential. The events and markets I'm looking at ahead: https://www.dailyfx.com/forex/video/daily_news_report/2021/10/23/SP-500-Reversal-ECB-Decision-FAANG-Earnings-Top-Volatility-Themes-Next-Week.html https://t.co/1SGirtalSb
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/wdbXlx7ChB
Crude Oil Continues to Rise as Industries Consider Switching Over From Expensive Gas

Crude Oil Continues to Rise as Industries Consider Switching Over From Expensive Gas

Daniela Sabin Hathorn, Analyst

Key Talking Points:

  • Oil demand picks up as industries switch over from expensive gas
  • Russia’s offer to supply gas could be months away due to approval delays

Oil prices are edging higher again at the start of this week as the energy crisis is likely to continue as global economies pick up economic activity and demand. A natural gas crunch is seeing spillover effects into oil prices as some industries are looking to replace gas shortages with oil, with experts predicting it could boost oil demand by over 1 million barrels per day during the winter months.

RUSSIA SUPPLY LIKELY MONTHS AWAY

Putin’s helping hand to ease supply shortages with an increase above its contractual obligations of the amount of gas it supplies to Europe saw gas and crude prices come off slightly from their highs last week. But the lack of approval from the European Union and Germany for the use of Nord Stream 2, a pipeline supplying Russian gas to Germany under the Baltic Sea, means the help from Russia could take months, potentially until May, meaning that supply shortages are likely to remain throughout the winter, keeping oil prices supported in the meantime.

Gas storages around Europe are at their lowest in years which means countries are going to be highly dependant on Russia for supply, a less than ideal situation and one that will likely see gas prices elevated for much longer.

Advertisement

US DENIES CLAIMS ABOUT RELEASING SPR

One of the risks for oil prices is the possibility of the US releasing its strategic reserves, despite claims from the Department of Energy that tapping into reserves is off the table for now. The climate crisis is their reasoning behind it saying that it is their main priority now as most leading economies pledged to go green in the next decade, but it wouldn’t be the first time a government was to backtrack in the face of soaring energy prices. Their solution, for now, is to continue talks with OPEC+ to ensure fairer prices as well as attempting to lower gas prices.

TECHNICAL ANALYSIS

The main trend in crude prices is up with the switch from gas to oil being the main driver behind bullish demand. Brent is still hovering below its 2018 high (86.65) and the RSI still has some way to go before overbought conditions get to the level of bearish reversal we’ve seen over the last 9 months meaning higher prices are likely in store. That said, I would expect to see some corrective pullbacks up ahead as the bullish trend consolidates and so the next resistance up ahead could be between $86 and $90 per barrel.

For US crude, the path seems a little clearer on the upside and there is little in the way of strong resistance up ahead before reaching $95. As with brent, I would expect some pullbacks along the way with a few minor resistance areas up ahead (82.88, 84.05, 85.85, and 90.74) which were the weekly highs above the current area as WTI was facing its 60% drop back in 2014.

Brent Crude Weekly chart

Crude Oil Continues to Rise as Industries Consider Switching Over From Expensive Gas

WTI Crude Weekly Chart

Crude Oil Continues to Rise as Industries Consider Switching Over From Expensive Gas

Fibonacci Confluence on FX Pairs

Learn more about the stock market basics here or download our free trading guides.

Traders of all levels and abilities will find something to help them make more informed decisions in the new and improved DailyFX Trading Education Centre

--- Written by Daniela Sabin Hathorn, Market Analyst

Follow Daniela on Twitter @HathornSabin

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES