Oil Price Outlook: WTI Rebounds to $72 Amid Supply Concerns; Hurricane Disruptions Loom

Historically, Trump’s pro-business policies have been seen as growth-oriented, fostering energy demand. However, his stance on monetary policy—opposing Federal Reserve easing—could add pressure to the oil market if it strengthens the U.S. dollar further.

A robust dollar often dampens oil demand from foreign buyers, as dollar-denominated commodities become more expensive globally.

https://twitter.com/saggitarius111/status/1854380385939153216

Hurricane Rafael and Gulf Production Cuts Add to Market Uncertainty

In addition to geopolitical pressures, physical supply disruptions in North America are adding volatility to oil prices.

Hurricane Rafael, now a Category 3 storm, has led to the closure of approximately 17% of Gulf of Mexico oil production, equivalent to 304,418 barrels per day, according to the U.S. Bureau of Safety and Environmental Enforcement. This production halt, though temporary, is tightening short-term supply, further buoying prices.

Moreover, the U.S. Energy Information Administration reported a significant inventory build-up of 2.1 million barrels for the week ending Nov. 1, bringing total stockpiles to 427.7 million barrels. This figure surpasses analysts’ expectations of a 1.1 million-barrel rise, indicating that while supply risks are present, demand remains constrained.

OPEC’s Upcoming Production Plans Pose Medium-Term Pressure

While current events are supportive of oil prices, medium-term factors, such as OPEC’s expected production increases in January, could cap further gains. Additionally, there is skepticism around the effectiveness of sanctions on Iran and Venezuela.

According to Phillip Nova’s senior market analyst, Priyanka Sachdeva, historical patterns show that major oil buyers like India and China may continue purchases regardless of sanctions, limiting the impact of Trump’s policies on global oil flows.

$72.60 cap for the last 2 days
Are we going to retest recent low of $69.75 today
and drop further to $68 tomorrow ?#cl #oil #usoil #wti #crude #gas #oott #FuturesTrading pic.twitter.com/4R2hnlTpEm

— bono trade avenue (@BonoTradeAvenue) November 6, 2024

Daily Technical Outlook: WTI Crude Oil – November 7, 2024

WTI crude oil has regained footing at $72.01, exhibiting resilience after touching key support levels. Immediate resistance now lies at $72.53, with subsequent levels at $73.12 and a more robust barrier at $73.64.

On the downside, support is found at $71.52, followed by $70.85 and $70.29 if selling pressure resumes. The 50-hour EMA at $71.60 is currently acting as dynamic support, underpinning the bullish momentum.

With the Relative Strength Index (RSI) at 54.86, WTI remains in a neutral territory, providing room for potential upside movement should the price remain above the pivot point at $71.60.

Conclusion: WTI crude appears positioned for further gains, but resistance near $72.53 must be cleared to confirm sustained upward momentum.