CME Group’s flash data for crude oil futures markets noted traders reduced their open interest positions for yet another session on Monday, now by around 5.6K contracts. Volume followed suit and went down by nearly 23K contracts.
WTI: En route to the November 2022 high
WTI prices extended the rally for yet another session on Monday, closing above the $92.00 mark for the first time since November 2022. The extra uptick was on the back of declining open interest and volume, which hints at the likelihood that a potential corrective move could be in the offing. On the upside, the next hurdle remains at the November 2022 peak at $93.73 (November 7).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Read More
As the global oil market is undergoing one of its biggest downturns ever due to the unexpected fall in demand, the long-term outlook seems to be looking more bearish for crude oil prices. With the world’s economies likely to experience one of the deepest recessions ever, the demand for fuel and other energy commodities is likely to remain weak for the foreseeable future. The demand for crude oil, in particular, is expected to remain weak, as the global transportation industry is under immense strain.
In this context, the short-term outlook for crude oil futures is looking bearish as well. Crude oil futures have fallen by over 30% from their peak of around $64 per barrel in early March, and a near-term correction could be on the cards in the coming weeks. On the other hand, with geopolitical tensions in the Middle East continuing to fuel oil prices, any potential further geopolitical developments could have a positive impact on crude oil prices. Nevertheless, with demand likely to remain weak and supply expected to remain ample, a significant short-term rally does not seem to be on the cards.
In addition, geopolitical tensions in the Middle East should be monitored closely over the coming weeks. Any further escalation of the hostility between the different nations in the region could lead to further supply disruptions and further push up crude oil prices. This could lead to an increase in the long-term outlook for crude oil, as investors will begin to speculate that a more protracted disruption in supply could send prices higher.
In conclusion, the short-term outlook for crude oil is most likely bullish in the near term, driven by geopolitical tensions in the Middle East. However, with the long-term outlook remaining bearish, investors should be mindful that a near-term correction could be in the cards. Careful monitoring of geopolitical developments, in particular, will be key in order to get a better understanding of the longer-term dynamics of the oil market.
