Oil sell-off deepens as Brent breaks below $60 – ING

FXStreet Insights Team FXStreet

Oil prices slid sharply as surplus fears intensified, pushing Brent below $60 per barrel, though supply risks and falling US Crude inventories offered limited near-term support, ING's commodity experts Ewa Manthey and Warren Patterson note.

US Crude stocks fall sharply

"The Oil market sell-off accelerated yesterday. ICE Brent is settling 2.7% lower, breaking below US$60/bbl to its lowest level since February 2021. This pressure comes from a growing surplus outlook. Hopes for a Russia-Ukraine ceasefire will undoubtedly add to the downward pressure. As our Oil balance shows, the peak of the surplus is expected in the first quarter of 2026. However, with every quarter of next year in surplus, inventories should grow throughout 2026, putting further pressure on Oil prices."

"There are clear supply risks to our view. Russian risks are well telegraphed, but there are clear risks to the Venezuelan Oil supply. Oil prices have bounced higher in early-morning trading today (WTI up around 1.3% at the time of writing), after President Trump ordered a blockade of sanctioned Oil tankers entering and leaving Venezuela. This follows the US seizing an Oil tanker off the coast of Venezuela last week. Venezuela exported around 600k b/d of Oil in November. It’s likely that these volumes will fall given the latest developments. The bulk of this Oil is shipped to China."

"American Petroleum Institute (API) inventory numbers released overnight were also supportive of the market. US Crude Oil inventories are reported to have fallen by 9.3m barrels over the last week. Meanwhile, refined product inventory changes were more bearish, with gasoline and distillate fuel Oil stocks increasing by 4.8m barrels and 2.5m barrels, respectively."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.