{"id":70526,"date":"2023-10-05T15:00:28","date_gmt":"2023-10-05T12:00:28","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=70526"},"modified":"2025-11-28T13:48:06","modified_gmt":"2025-11-28T11:48:06","slug":"oil-report-bears-at-the-wheel","status":"publish","type":"post","link":"https:\/\/www.ironfxcn.com\/nl\/oil-report-bears-at-the-wheel\/","title":{"rendered":"Oil report | Bears at the wheel"},"content":{"rendered":"

Oil prices have rapidly decreased<\/a> over the past two days, with analysts citing weak demand factors. In this report, we aim to shed light on the factors driving WTI\u2019s price, assess its future outlook, and conclude with a technical analysis of Crude.<\/p>\n\n\n\n

Factors driving (Oil) WTI\u2019s price<\/strong><\/h2>\n\n\n\n

OPEC+ Ministerial Meeting.<\/strong><\/h3>\n\n\n\n

An OPEC+<\/strong> Ministerial meeting took place on Wednesday, in which the group made no changes to the group\u2019s oil<\/strong> output policy, which may have provided support for the price of the commodity, yet that appears to have not materialized. Furthermore, following last week\u2019s statements by Russia that they would be sticking to their original agreement with OPEC+ to reduce oil production, the liquid gold<\/strong> edged closer and closer to the $100 per barrel <\/strong>figure, but since the beginning of the week, it appears to have reversed trajectory and moved lower to levels last seen at the end of August 2023.<\/p>\n\n\n\n

In addition, it appears that external factors such as demand may be mitigating the production cuts of OPEC+ such as demand side worries, which may be counteracting against the group\u2019s aims of preserving oil prices<\/strong> at higher levels. Lastly, we personally believe that any attempt to increase oil production cuts<\/strong> from their current levels may be met with fierce opposition from nations who have repeatedly expressed discontent and a desire to increase oil production such as the UAE<\/strong>. Therefore, we believe that the group may not be able to cut production further and that the price of oil may be dictated by other factors. On the other hand, should the group announce further production cuts, we may see the commodity gaining support.<\/p>\n\n\n\n

US seasonal gasoline demand slumps to levels last seen in 1998<\/strong><\/h3>\n\n\n\n

During yesterday\u2019s American session, the U.S. gasoline Inventories<\/strong> figure came in at 6.481M, a much greater increase in inventories than the expected figure of 0.161M. The greater-than-expected figure marks the lowest level in seasonal<\/strong> gasoline<\/strong> demand<\/strong> since 1998 according to Bloomberg. The implications of a reduction in demand could be that the high inflation rate<\/strong> and oil prices could greatly affect the disposable income of consumers. Furthermore, a reduction in demand could potentially reflect that the current prices of oil may not be sustainable and could be indicative of a deterioration<\/strong> in economic<\/strong> activity<\/strong> in the US<\/strong>. As a result, the reduction in demand seems to have heavily weighed on the price of the commodity, as concerns about a potential recession appear to be re-emerging, following a relatively quiet period of no major concerns of a major recession. However, we should note that despite current concerns emerging about the US economy<\/strong>, the reduction in demand could be temporary, and as such the current implications may be more of a short-term view.<\/p>\n\n\n\n

The dispute between Turkey and Iraq over an oil pipeline continues<\/strong><\/h3>\n\n\n\n

According to Bloomberg<\/strong>, International oil companies are stating that they are facing $1 billion in losses, as the dispute between Turkey<\/strong> en Iraq<\/strong> over a closure of a key crude export pipeline continues to be prolonged. A separate report by Reuters stated that Turkey was ready to restart the operation of the pipeline this week, yet it appears that may not be the case, as the issue over damages owed to Baghdad by Ankara still persists. Despite the current issues, the pipeline<\/strong> has already been closed for over 6 months and as such may not heavily influence the oil<\/strong> markets. However, should it be re-opened and the supply of oil into the international markets is increased, we may see the price of oil weakening. On the other hand, should the pipeline<\/strong> remain closed, we may see some support in the oil markets<\/strong>, yet we believe that in such an event, the potential support for the commodity\u2019s<\/strong> price could be minimal.<\/p>\n\n\n\n

Oil: Technical Analysis<\/strong><\/h2>\n\n\n\n

WTI Cash Daily Chart<\/strong><\/strong><\/h3>\n\n\n\n
\"A<\/figure>\n\n\n\n