Fundamental Forecast for Oil: Neutral
Oil Talking Points:
- Oil Prices Stubbornly Hold July Range Following Failed Breakout Attempt[1].
- Crude Oil Analysis: API and Intensifying Trade War Weigh on Oil Prices[2].
- Are you looking for longer-term analysis of Oil prices[3]? Check out our Quarterly Forecasts as part of the DailyFX Trading Guides[4].
Oil[5] prices continued to move lower this week as global markets wrestle with the prospect of increased production. In late-June, OPEC and a group of ten non-OPEC oil producing countries announced that supplies would be increased[6] as production caps were lifted in the effort of offsetting Iranian production after US sanctions go into effect. This move also brought the potential to moderate the hefty gains[7] that had been seen over the past year, which have nudged inflation numbers-higher across the world, even catching the ire of President Trump[8]. In late-May, Brent crude temporarily eclipsed the $80 level, and WTI topped $75 in early-July: Both markets are now in the midst of a pullback as US inventories are piling up to go along with this backdrop of increasing global production.
All hope is not lost for Oil bulls, however, as we still have the potential for supply shocks given some of the geopolitical tensions that have flared in key producers like Venezuela or Iran, and this may be an operative reason for a hold of support this week despite the continued threat of increasing supplies.
WTI Crude Oil Daily Price Chart: Down on the Week, Hold of Support
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