{"id":70938,"date":"2023-10-12T16:39:05","date_gmt":"2023-10-12T13:39:05","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=70938"},"modified":"2025-11-25T11:20:16","modified_gmt":"2025-11-25T09:20:16","slug":"israeli-conflict-complexes-oil-fundamentals","status":"publish","type":"post","link":"https:\/\/www.smartchinaeducation.com\/ko\/israeli-conflict-complexes-oil-fundamentals\/","title":{"rendered":"Israeli conflict complexes oil fundamentals"},"content":{"rendered":"

Oil prices presented some wide fluctuations in the oil past week<\/a> characteristic of the market\u2019s sentiment for the international oil market. In this report, we aim to shed light on the factors driving WTI\u2019s price over the past week, assess its future outlook and conclude with a technical analysis of WTI.<\/p>\n\n\n\n

The bear\u2019s hesitation<\/strong><\/h2>\n\n\n\n

WTI\u2019s prices had started to stabilise in the late American session on Friday, also for technical reasons as the downward movement of WTI\u2019s price started to seem a bit overstretched. It should be noted that even the widely better-than-expected NFP figure that implied a relatively tight US employment market, failed to provide support for the USD and in that way to weigh on oil prices. Hence last week ended with some hesitation on behalf of oil bears to continue.<\/p>\n\n\n\n

Monday\u2019s positive gap<\/strong><\/h2>\n\n\n\n

On Saturday early morning, the dramatic raid of Hamas over Israeli territory took place, which shook the world and tended to create substantial worries in the oil market as well. The fear of an escalation of the crisis at an international level, with other Arab countries taking part in the conflict understandably intensified market worries for further tightening of the supply side of the international oil market. As a consequence, on Monday\u2019s opening, demand for oil surged substantially and pushed oil prices higher by more than $3 per barrel allowing for WTI prices to stabilise at around $84.50 per barrel for the next couple of days.  <\/p>\n\n\n\n

Oil: Saudi Arabia\u2019s pledge<\/strong><\/h2>\n\n\n\n

Yet market worries for a possible further tightening of the supply side of the international oil market tended to ease on Wednesday, practically allowing oil prices to drop near yet just above Friday\u2019s closing level. Analysts tend to highlight as the main factor behind the drop, Saudi Arabia\u2019s pledge to help stabilise the oil market. Yet at this point, we should note that Russia seems also to be taking part in this effort yet with all the sanctions set on Russian oil, the effect may be limited. The main point of interest remains Saudi Arabia, given its proximity geographically and culturally to the Palestinians, but also its position as the main OPEC oil producer and its lowered production levels.<\/p>\n\n\n\n

The slack in the US oil market<\/strong><\/h2>\n\n\n\n

Yet the drop of oil prices on Wednesday may also have been maintained by the release of the API weekly US crude oil inventories. The report showed an increase of US oil inventories by 12.94 million barrels, while EIA is also expected to show an increase, yet far narrower. Should also EIA indicate an increase in US oil inventories that would imply that demand was not able to catch up with production levels, thus implying a slack in the US oil market that may weigh somewhat on WTI\u2019s prices.<\/p>\n\n\n\n

Thursday\u2019s jump<\/strong><\/h2>\n\n\n\n

During today\u2019s European session, we note that both Brent and WTI prices rose simultaneously as OPEC stuck to its forecast for a robust oil demand at an international level, with consumption being at 2.44 million barrels per day (bpd) in 2023 and a bit lower at 2.25 bpd the coming year. Yet at this point, we note that OPEC\u2019s forecasts tend to collide with EIA, which expects an easing of oil demand in the coming year due to worse conditions in China, India and Brazil. May we also note that the German government is now expecting the economy to shrink by 0.4% this year, implying a recession and the situation could be regarded as indicative of Europe and thus may weigh on oil demand.<\/p>\n\n\n\n

The oil way ahead <\/strong><\/h2>\n\n\n\n

For the time being the situation in the international oil market tends to be quite fragile. Fundamentals that traditionally surround the oil market have become more complex with the conflict in Israel and the market is still having a wary eye over the situation there and how it could affect oil prices. We still consider that a possible escalation of the war in Israel especially if neighbouring Arab countries are to take part, directly or indirectly may have a bullish effect on oil prices, as market worries for the supply side of oil are expected to intensify. On the demand side we would highlight any signs of increased economic activity in China that may provide some support for oil prices, and vice versa. Also we would note that the possibility of a tight financial environment in various countries could have an adverse effect on economic activity and weigh on oil demand. <\/p>\n\n\n\n

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

WTI Cash H4 Chart<\/strong><\/h3>\n\n\n\n
\"A<\/figure>\n\n\n\n