Oil prices are falling like a rock at the US trading session as markets are repricing recent string of events. The recent repricing is granted after a ceasefire between Israel and Palestine and the overnight numbers from the American Petroleum Institute revealed a very substantial build in US stockpiles. These key elements are enough to send Oil prices lower this Wednesday. Meanwhile, the US Dollar (USD) is soaring after the latest Fed Minutes was published on Tuesday night. Although no surprises, markets got spooked a bit by the fact that all members were unanimously agreeing not to move rates anytime soon. This means that markets need to pull back a bit of their earlier enthusiasm that rate cuts could emerge very soon. The latest Minutes thus reveal that markets have been a bit too enthusiastic, which means that yields could start soaring a bit and the Greenback gains a bit of strength in the US Dollar Index (DXY). Crude Oil (WTI) trades at $74.67 per barrel and Brent Oil trades at $79.28 per barrel at the time of writing.
Oil prices are gearing up for a very packed US calendar. All numbers that normally would come out from Wednesday to Friday, will now be concentrated on this Wednesday evening as Thanksgiving is taking place on Thursday. Expect to see substantial volatility. For now crude prices are steady despite the headlines about a ceasefire in the Middle East and the recent build in US stockpile. Should this Wednesday evening’s EIA numbers reveal a similar big build, expect to see a substantial drop ahead of the OPEC meeting this weekend.
On the upside, $80.00 is the resistance to watch out for. Should crude be able to jump higher again, look for $84.00 (purple line) as the next level to see some selling pressure or profit taking. Should Oil prices be able to consolidate above there, the topside for this fall near $93.00 could come back into play. On the downside, traders are seeing a soft floor forming near $74.00. This level is acting as the last line of defense before entering $70.00 and lower. Once in that area, markets might factor in the risk of a surprise intervention from OPEC+ to jack up Oil prices once again.
