Middle Eastern Conflicts and Chinese Demand in Play

Key Insights

• Oil Prices Stabilize Amid Diminished Supply Concerns, Yet Demand Worries Persist.
• Brent and WTI Suffer Longest Weekly Loss Streak, With Chinese Demand Fears Influencing Markets.
• Natural Gas Shows Bearish Trends, While U.S. Crude Oil Displays Tentative Recovery Signs.

Quick Fundamental Outlook

Oil prices stabilized on Friday, maintaining their previous session’s gains, yet are poised for a third consecutive weekly decline. The easing of supply disruption concerns from the Israel-Hamas conflict has shifted focus back to demand worries.

Both Brent and WTI are experiencing their longest weekly loss streak since early May, reflecting decreased supply risks from the Middle East. Concurrently, rising demand concerns, particularly from China, are impacting market sentiments.

Weak Chinese economic indicators and reduced requests for Saudi oil by Chinese refiners have exacerbated demand worries. Despite this, Citi analysts anticipate a market recovery, supported by easing refinery maintenance and shifting investor sentiments.

In the Natural Gas (NG) markets, the Daily Technical Outlook for November 9 reveals a cooling trend, with NG prices retracting 1.95% to $3.1720. The four-hour chart highlights a bearish pivot as NG breaks below the $3.234 level, eyeing support territories down to $2.901.

The RSI, teetering at 29, flags an oversold market, hinting at potential exhaustion in selling pressure. In contrast, the MACD’s negative crossover indicates the bears might not be done yet, reinforcing a cautious sentiment.

Price action slipping below the 50 EMA at $3.3606 reinforces the bearish outlook, although a bounce-back cannot be ruled out if oversold conditions lead to a reactionary buying. As NG navigates turbulent waters, the short-term trend remains bearishly anchored below $3.234, with a watchful eye on whether the current support levels will hold or fold under sustained pressure.

WTI Oil Price Forecast

 

In the commodities sphere, U.S. crude oil (USOIL) is showing tentative signs of recovery, edging up by 0.70% to $76.10, as indicated in the Daily Technical Outlook for November 9. The four-hour chart suggests a slight bullish momentum, but the asset still hovers below the pivotal $77.55 mark, which casts a shadow over its immediate trajectory.

Immediate resistances are looming at $79.37 and $81.22, with a further barrier at $83.40, while supports are firming at $75.35, possibly extending down to $72.61. Despite the uptick, the Relative Strength Index (RSI) languishes at 40, highlighting a bearish sentiment that’s not quite oversold yet. Meanwhile, the MACD’s bearish stance, with a negative reading beneath the signal line, adds to the cautious outlook.

Price movement below the 50-day Exponential Moving Average (EMA) of $79.8800 further aligns with a short-term downward trend, as seen in the current formation of a downward channel. In summary, USOIL’s near-term prospects appear bearish as long as it stays below $77.55, and only a sustained break above this level could shift the forecast towards a more bullish scenario.

Brent Oil Price Forecast

In today’s Daily Technical Outlook for UKOIL on November 9, the asset exhibits a positive movement, registering an uptick of 0.88% to $80.36. The key pivot point stands at $81.53, with immediate resistance and support levels identified at $83.47 and $79.28 respectively.

Additional resistance and support levels are noted at $85.28, $87.57, $77.58, and $76.15. The Relative Strength Index (RSI) stands at 40, suggesting a bearish sentiment, as it’s below 50. The Moving Average Convergence Divergence (MACD) shows a value of -0.04, hinting at a potential downward trend.

The 50-Day Exponential Moving Average (EMA) at $83.98 indicates a short-term bearish trend as the current price is below this level. The observed downward channel in the chart pattern reinforces the bearish outlook.

Overall, the trend is bearish below the $81.0 mark, and we anticipate the asset to test these resistance levels in the short term.

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