Crude Oil Prices analysis: Geopolitical Tensions, OPEC cuts oil demand

Crude oil prices continue to see a lot of noise in general, as the market continues to be focused on the global economy, and of course the geopolitical issues that always are a problem.

Crude Oil Technical Analysis

West Texas Intermediate (WTI) crude oil experienced a slight pullback in early Monday trading, though it's currently attempting to recover. It's important to recognize that the market has been quite volatile over the past few weeks, and this choppiness is likely to persist. Several factors are at play, and these will continue to influence price movements, making it essential to manage position sizes carefully.

Geopolitical tensions in the Middle East remain a key driver of crude oil volatility, but concerns about the global economy also weigh on the market. While central banks cutting rates might stimulate demand, it could also indicate deeper economic challenges ahead. On the technical side, $71.50 serves as a significant support level, while $75 is a strong resistance barrier. Prices are currently hovering between these two key levels.

Brent markets look very much the same and at this point, I’m watching the $76 level underneath as potential massive support, just as the $80 level above is significant resistance. We did kick off the week with a gap lower. So that might be worth paying attention to as gaps do tend to get filled in the futures markets, but it’s a little early to call for that flat out.

Oil falls 2% as OPEC cuts oil demand growth view

Oil prices fell 2% on Monday as OPEC again lowered its outlook for 2024 and 2025 global oil demand growth while China's oil imports fell for the fifth straight month.
China's stimulus plans failed to inspire investor confidence while markets kept watching for potential Israeli attacks on Iranian oil infrastructure.

Brent crude futures settled $1.58, or 2%, lower at $77.46 per barrel. U.S. West Texas Intermediate crude futures fell $1.73, or 2.29%, to $73.83 per barrel. Brent had gained 99 cents last week, while WTI climbed $1.18.

Brent fell 5%, or more than $4, in after-hours trading following a media report that Israeli Prime Minister Benjamin Netanyahu told the U.S. that Israel is willing to strike Iranian military targets and not nuclear or oil ones.

Oil prices are plummeting despite Middle Eastern chaos

As global leaders prepare to meet in Azerbaijan on November e 11th, for the climate summit COP 29, organized once again by a large oil producing country, in a surprising twist, oil prices are experiencing a steep decline even as turmoil rages in the Middle East. Typically, conflicts in this critical oil-producing region raise fears of supply disruptions, which would usually drive prices upward. However, a combination of weakening demand from China, geopolitical maneuvering, and broader economic conditions is leading to this unexpected trend.

A major driver behind the recent drop in oil prices is the weakening demand from China, the world's largest crude oil importer. As of October 14, 2024, Brent crude futures dropped by $1.58, or 2.02%, to $77.44 per barrel, while U.S. West Texas Intermediate (WTI) crude fell by $1.64, or 2.17%, to $73.92 per barrel. Additionally, OPEC has downgraded its 2024 growth forecast for China’s crude oil consumption, reducing the estimate from 650,000 barrels per day (bpd) to 580,000 bpd. This significant revision reflects a concerning trend: China’s crude imports over the first nine months of 2023 have declined nearly 3% year-over-year, averaging approximately 10.99 million bpd.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.