Risk Premium Fades, Oil Stay
The fundamentals behind oil's current weakness are primarily due to the fading geopolitical risk premium. The market sees the possibility of a resumption of US-Iran nuclear talks within days, so concerns about a regional war that previously fueled oil prices are starting to diminish. If Middle East tensions ease, the market typically immediately discounts the risk factors that have been driving prices.
Furthermore, the focus returns to the main story of the oil market: supply tends to be oversupply. There's also the potential issue of a US-India deal that could curb India's purchases of Russian oil—this could lead to an even greater flow of sanctioned barrels into the global market. Additionally, a strengthening US dollar makes commodities more expensive for non-dollar buyers, putting further downward pressure on oil prices. (asd)
Oil price at the time of this analysis is $65.95
- Buy if the price moves within $66.05
- Sell if the price moves within $65.86
Resistance 2: $66.34
Resistance 1: $66.15
Support 1: $65.77
Support 2: $65.58
Disclaimer
This article is analytical in nature and is not a definitive reference. Please consider the influence of fundamental and technical developments in trading before making any investment decisions.
Source: Newsmaker.id
