Oil Prices Slip on Inventory Build & IEA’s Upgraded Supply Outlook
USOIL Analysis
Continued hostilities the Middle East, this key energy hub, have helped USOil make a good start to the year. It takes another crack at the pivotal 38.2% Fibonacci of the Q4 slump, which bring the 84.90 handle in the spotlight, but we are cautious around the ascending prospects. Any strength appears to be driven by supply disruptions, rather than demand creation, a force that has its limitations.
In fact the International Energy Agency (IEA) believes that the pace of demand expansion is "set to decelerate further", to 1.2 million barrels per day (mbpd) this year (from +2.3 mbpd in 2023, according to today's monthly report). More to it, the agency believes that supply should "more than eclipse" the demand rise. IEA hiked its supply growth forecast to 1.7 mbpd (from +1.5 mbpd previously) [1]. Furthermore, Wednesday's data from the US Energy information Administration revealed a massive jump in inventories last week, to the tune of twelve million barrels.
USOil rejected the critical 38.2% Fibonacci for second time this year. This keeps the December lows in play (67.69), but strong catalyst would needed for a test.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 27 Apr 2024 https://www.iea.org/reports/oil-market-report-february-2024 |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.