Supply risks reduce the demand for Oil – TDS

FXStreet Insights Team FXStreet

Oil markets are now succumbing to a reversal of systematic flows, TDS Senior Commodity Strategist Ryan McKay notes.

The upside is likely capped for WTI

“Commodity Trading Advisors (CTAs) could remain modest buyers in the short-term in Brent crude, but WTI would need to see prices rally back above $82.50/bbl to renew upside flows.”

“However, we are not anticipating another rout in prices as supply risks are back in focus with tensions building in the Middle East between Israel and Lebanon, while further ship attacks in the Red Sea reignite concerns.”

“A renewed increase in our energy supply risk indicator can support price action in the near term, but ultimately, we still argue the upside is likely capped by increasing global supply and potential OPEC+ increases, which put 2025 balances in question.”

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.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.