Oil muted despite weakening dollar
2023-11-15
Summary:
Middle East tensions lifted Wednesday's Asian oil prices, but they showed a limited response to Tuesday's US inflation-easing signs.
Oil prices rose in early Asian trade on Wednesday on Middle East tensions though they barely reacted positively to more signs of easing inflation in the US on Tuesday.
Israel says its military is carrying out an operation against Hamas in the biggest hospital in Gaza City. The US says it has intelligence backing Israel's claim that Hamas has a command centre under that health facility.
The IEA raised its oil demand growth forecasts for this year and next despite an expected slowdown in economic growth in nearly all major economies. Its 2024 outlook remains much more downbeat than that of OPEC.
US consumer prices were unchanged in Oct due to falling energy costs. Expectations that the Fed could cut interest rates sooner sent the dollar to a low in 2.5 months.
Hedge funds and other money managers sold the equivalent of 57 million barrels in the six most important futures and options contracts over the seven days ending on 7 Nov. The bullish sentiment that manifested itself in the third quarter has faded.
Similarly, portfolio investors are struggling to become bullish about the outlook for US gas prices in the face of record production and a mild start to the winter heating season.
Gas price has seen a deep pullback since its break of the neckline of the double top pattern. The uptrend scenario remains intact as long as it holds above the 50 MA.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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