{"id":79157,"date":"2024-03-28T16:02:38","date_gmt":"2024-03-28T14:02:38","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=79157"},"modified":"2025-12-11T13:12:40","modified_gmt":"2025-12-11T11:12:40","slug":"oil-outlook-hesitation-of-oil-bulls","status":"publish","type":"post","link":"https:\/\/www.smartchinaeducation.com\/en\/oil-outlook-hesitation-of-oil-bulls\/","title":{"rendered":"Oil Outlook: Hesitation of oil bulls?"},"content":{"rendered":"\n

WTI\u2019s price action seems to have been wobbling yet a bullish predisposition seems to remain present among oil traders since our last report.<\/a> For the time being, we intend to have a look at the conditions in the US oil market yet also have a look at the supply and demand sides of the international oil market. In this report, we aim to shed light on the catalysts driving WTI\u2019s price, assess its future outlook and conclude with a technical analysis.<\/p>\n\n\n\n

Oil: Overview Report<\/strong><\/h2>\n\n\n\n

US oil market\u2019s tightness interrupted<\/strong><\/h3>\n\n\n\n

The tightness of the US oil market seems to have been interrupted. We note though that the number of active oil rigs in the US dropped by one, which tended to imply some slight easing demand. The worries for the demand side of the US market heightened as API reported a substantial rise of US inventories, reporting a substantial increase of 9.3 million barrels. Furthermore, an increase of oil inventories was also reported by EIA the following day albeit narrower this time, with the increase reported being of 3.165 million barrels. <\/p>\n\n\n\n

Despite the divergence of the amounts reported by the API and EIA, the key take-away seems to be that oil production levels were able to reach and surpass aggregated US demand, thus marking an interruption of the tightness of the US oil market. Should the slack in the US oil market widen in the coming week, we may see it having a bearish effect on Oil prices.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/p>\n\n\n\n

The supply side of the international market<\/strong><\/h3>\n\n\n\n

The uncertainties characterising the supply side of the international market tend to push oil prices higher. We note that Russia\u2019s government was reported to have instructed Russian oil companies to reduce production levels to reach OPEC targets. Russian energy minister Novak stated that Russia is to cut oil output and exports by an extra 471k barrels per day (bpd) until the end of the current quarter. <\/p>\n\n\n\n

The production cuts announced tend to intensify the uneasiness of oil traders for the supply side of the international oil prices. Overall we expect OPEC\u2019s intentions to cut production levels to maintain a relative tightness in the international oil market and could intensify market worries for the supply side of the market thus oil prices may get some support in the coming week<\/p>\n\n\n\n

A robust demand side could support oil prices<\/strong><\/h3>\n\n\n\n

Forecasts for the outlook of the demand side of the international oil market seem to be quite optimistic. It\u2019s characteristic that the International Energy Agency was reported to forecast demand will rise by 1.3 million barrels a day in 2024. Similarly, OPEC officials also expect oil demand to rise in the year. Such expectations understandably may provide support for oil prices, yet we tend to remain rather skeptical about the issue. <\/p>\n\n\n\n

We would like to see more concrete evidence stemming from China and the US about increased oil demand, or at least factors underpinning the demand . It should be noted that in the coming week, we get China\u2019s and the US manufacturing PMI figures for March and a possible improvement of economic activity in the manufacturing sector could provide some more credibility to the forecasts of increased oil demand and could thus support oil prices. \u00a0\u00a0<\/p>\n\n\n\n

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

WTI Daily Chart<\/strong><\/h3>\n\n\n\n
\"EU\/USD<\/figure>\n\n\n\n