WTI dips to weekly lows in mid-$75.00s amid choppy year-end trade, remains on course for massive annual gains


  • WTI has dipped back into the mid-$75.00s and is currently trading just above weekly lows set earlier in the session.
  • Low liquidity and year-end profit-taking has resulted in choppy trading conditions for oil prices on the final day of the year.
  • Nonetheless, WTI is set to post massive annual gains of more than 55%.

Front-month WTI futures slipped to fresh lows for the week near $75.00 per barrel in recent trade amid what appears to be some modest profit-taking in holiday-thinned trading conditions on the final session of the year. Prices have since rebounded to around the $75.50 mark, but choppiness may continue into the US session amid expectations for a continued lack of liquidity.

Intra-day volatility that has seen WTI dip just under $1.0 on the session shouldn’t distract from the fact that oil prices are set to post their best annual return since 2009. WTI is set to post gains of more than 55% having surged from lows last January of underneath $50.00 per barrel. Crude oil has surged this year as the global economy has recovered from the 2020 pandemic-induced recession and become more resilient with time to successive waves of the virus, largely thanks to rising vaccination rates.

After surging as high as the $85.00s in October (annual gains of nearly 80% at the time), oil prices saw a sharp correction lower in November and into December on fears of economic disruption and crude oil demand destruction after the emergence of the new, highly transmissible Omicron variant of Covid-19. However, as evidence has built over the last few weeks that the new variant is far milder than any prior strains of the virus and government’s have held off on imposing lockdowns, risk-appetite and crude oil prices have recovered sharply. WTI is thus set to post a monthly gain of about $8.50 or nearly 13% and is more than $12.50 or 20% up from earlier monthly lows in the $62.00s.

But Omicron risks remain, with countries across the world (including the US, UK and Australia)reporting record daily infections and this is capping oil’s gains. The fact that New Year’s celebrations have been canceled across many parts of the world is indicative of some of the near-term risks faced by the global economy and could perhaps be behind some of Friday’s year-end profit-taking. Separately, some investors fear supply-side dynamics could weigh on oil prices in 2022 as OPEC+ and US output climbs.

These fears were on show in a poll released by Reuters on Friday. The median forecast of survey participants was for WTI to average slightly more than $71.00 over the course of 2022, a downwards revision of expectations for next year’s oil prices from the November poll. In the prior poll, the median investor forecast had been for WTI to average just over $73.00 next year. Sources speaking to Reuters earlier in the week said that the cartel looks on track to agree to hike output by 400K barrels per day again in February. According to analysts at Julius Baer, “with oil demand growth slowing, supply growth persisting, and the energy crunch easing, we see the oil market balance expanding rather than shrinking in 2022 and thus expect prices to trend lower from today's levels.”

USOil

Overview
Today last price 75.39
Today Daily Change -0.95
Today Daily Change % -1.24
Today daily open 76.34
 
Trends
Daily SMA20 72.06
Daily SMA50 75.7
Daily SMA100 74.16
Daily SMA200 70.76
 
Levels
Previous Daily High 77.26
Previous Daily Low 75.61
Previous Weekly High 73.85
Previous Weekly Low 66.1
Previous Monthly High 83.97
Previous Monthly Low 64.32
Daily Fibonacci 38.2% 76.63
Daily Fibonacci 61.8% 76.24
Daily Pivot Point S1 75.55
Daily Pivot Point S2 74.76
Daily Pivot Point S3 73.9
Daily Pivot Point R1 77.19
Daily Pivot Point R2 78.05
Daily Pivot Point R3 78.84

 

 

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD has turned south and declined toward 0.9600 in the second half of the day on Monday. A sharp decline witnessed in the GBP/USD pair and the souring market mood provided a boost to the dollar, lifting the US Dollar Index back above 114.00. 

EUR/USD News

GBP/USD falls below 1.0700 following BoE statement

GBP/USD falls below 1.0700 following BoE statement

GBP/USD came under renewed bearish pressure and slumped below 1.0700 during the American trading hours. In a statement published on Monday, the Bank of England said that they welcome the government's commitment to sustainable economic growth, triggering another GBP selloff.

GBP/USD News

Gold could soon challenge the $1,600 level

Gold could soon challenge the $1,600 level

Demand for the dollar continued at the beginning of the week, resulting in XAUUSD plummeting to $1,626.67, its lowest since April 2020. Concerns about potential recessions undermined the dismal market’s mood, pushing the greenback higher despite its extreme overbought conditions.

Gold News

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin price has been devoid of volatility for the last week and has been in a tight consolidation without directional bias whatsoever. This range bound move has formed a triangle pattern which could break either way. 

Read more

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

The S&P 500 index lost 4.1% last week and left traders melancholy with another week to go in this dreadful September. The S&P 500 index is down 6.6% so far in the month that is already known for poor performance, and most seem to think the pain will continue. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures