November 9, 2022 (Investorideas.com Newswire) Less than a month from now - on December 5 - an embargo on maritime exports of Russian crude oil to the European Union will come into force, as I explained in my last article.
As a result, global oil supply is expected to tighten significantly, with Russia being the world's largest exporter of oil and fuels.
Therefore, energy markets are bracing for turbulence, as they may face a new storm of volatility.
On the macroeconomic view, the US Dollar Currency Index - still weakening against a basket of major currencies - starts looking down from the balcony to revisit some lower floors:
While currently moving slightly outside the lower band of the 2022 regression channel, its previous swing low from October has just been taken over as the DXY is now progressing within a newly forming downward regression channel starting from the end of the last quarter.
Let's zoom into a 4H chart to get a larger picture:
Here is the big picture for the WTI Crude Oil chart, after zooming out over the weekly timeframe:
The long-term structure looks rather bullish for the black gold - with an upward trend that could be triggered as the greenback may start to explore lower floors.
At the moment, if we consider the past two sessions this week alone, both assets are correlated rather positively (both falling at the same time).
But this short-term correlation may start to turn negative if we see further weakening on the US dollar, which would have the effect of propelling commodities, starting with energy. But gold can also benefit from this, as investors may switch to the yellow metal as a new safe-haven.
If oil prices fell on Tuesday (Nov 8th), it was mainly because they were weighed down by disappointing indicators in China and a resurgence of the epidemic which threatens demand in the country, one of the engines of global demand.
Demand in China - the country that imports the most crude in the world and also the second consumer of oil (after the United States) - is particularly unstable since the health authorities assured that the strict zero-Covid health policy would continue to be applied.
Moreover, as financial market players are increasingly concerned about the state of the global economy, the latest commercial data from China, which also highlighted a significant slowdown, seems to have proven them right.
This is the scenario I'm expecting will play itself out. Now, please tell me about yours!
Like what you've read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!
Oil & Gas Trading Strategist
The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri's reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com