CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Crude Oil Analysis: Is Oil Heading Back to the 80-zone?

Article By: ,  Market Analyst
August 13, 2024 2:33 PM

Key Events

  • OPEC Monthly Report vs IEA Short-term energy outlook
  • US PPI and CPI Reports
  • Crude Oil Inventories

OPEC Monthly Report

The latest report by OPEC highlighted a decreased outlook for global oil demand for 2024 and 2025, supported by declining demand projections from the Chinese economy and the Middle East. This report aligns with the latest highs on oil, slightly below the 80-barrier.

US PPI and CPI Reports

The latest Producer Price Inflation (PPI) figures fell below expectations, adding further confirmation towards an upcoming rate cut and stimulating bearish sentiment on the US Dollar Index.

The next key indicator to watch is the Consumer Price Index (CPI) on Wednesday, which is expected to influence the rate cut magnitude in September.

Given the magnitude of volatility surrounding the US CPI, the impact of crude oil inventories is expected to be minimal.

Technical Outlook

Crude Oil Analysis: USOIL – Daily Time Frame – Log Scale

Source: Tradingview

Climbing back inside its consolidation range, the upside potential for crude oil is set to be limited below the 2024 highs. However, further developments can alter the forecast.

Trading cautiously ahead of the CPI data, crude oil has reached the previously mentioned 79-zone. Positive projections from the IEA report and geopolitical tensions boosted oil prices up until the negative projections from the OPEC report near the 80 zone barrier.

Upside Potential: A close above the 80 barrier could lead oil prices to retest levels at 81.50, 83, and 84.30, respectively.

Downside Potential: As the latest high aligns with the 0.618 Fibonacci retracement level of the drop between the July 2024 high and August 2024 low, oil could resume its downtrend back towards the lower border of the consolidation at 75.30. A close below this border and under the 75 level could drag oil prices back towards the 71.40 level.

--- Written by Razan Hilal, CMT – on X: @Rh_waves

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024