Crude Oil

Crude Oil weekly special report based on 1.00 Lot Calculation:

GEOPOLITICS: MIDDLE EAST TENSIONS KEEP MARKETS NERVOUS

• ISRAEL- HAMAS WAR ESCALATES AS CEASFIRE NEGOTIATIONS FAILED: Hamas leader Ismail Haniyeh said that pre-Ramadan truce negotiations had failed because Israel refused to promise a permanent ceasefire. The comments came a day after Israel’s Mossad intelligence service issued a rare statement blaming Hamas for the impasse. According to Reuters, Israel is expected to go after the remaining Hamas battalions in Rafah despite strong international criticism and is preparing a plan to get civilians out of harm’s way. Israel is preparing for a new ground assault on Rafah, a small city on the southern border with Egypt where over half of Gaza's 2.3 million people are now living, mostly in makeshift tents. Egypt warned of "dire consequences" of a potential Israeli military assault on Rafah.
• RED SEA, SUEZ CANAL WERE AVOIDED BY SHIPPING AND OIL TANKER COMPANIES. Middle East tensions, compounded by the ongoing Israeli ground offensive of the Gaza Strip, keep many oil investors nervous. Meanwhile, Yemen’s Houthis continue to pose a threat to the many ships transiting through the Red Sea. Some analyses show that around 9 million barrels a day of oil transits through the Red Sea. This is almost 10% of total global oil demand. Therefore, many investors fear the worst: oil delivery delays and higher oil prices thereafter. The Houthis have already claimed responsibility for many attacks on ships bound for Israel and have shown no signs of backing down.

OPEC +:

• OPEC EXTENDED ITS CURRENT OIL PRODUCTION CUT POLICY INTO Q2 OF 2024, WHILE RUSSIA SAID WILL REDUCE PRODUCTION FROM CURRENT 9.5 TO 9.0 MILLION BARRELS A DAY. According to Bloomberg, Russia's Deputy Prime Minister Alexander Novak said that Moscow will reduce its output by 350,000 barrels a day (bpd) in April, by 400,000 bpd in May and then 471,000 bpd in June. Russia also agreed to further trim its export volumes — by 121,000 bpd in April and 71,000 bpd in May, compared to its average sales in the same months last year. Novak said late last month that Russian oil output stood at 9.5 million bpd. Their output is set to drop to almost 9 million bpd in June, if the reduction is implemented as planned.
• OPEC OIL MONTHLY REPORT (DECEMBER): A 1.8 MILLION BARRELS A DAY OF DEFICIT EXPECTED IN 2024. December oil price drop was mainly driven by selling pressure from speculators.

ANALYST EXPECTATIONS 2024

• CITIGROUP: OIL COULD HIT $100 WITHIN THE NEXT 12- 18 MONTHS. According to CNBC, the catalysts for oil to hit $100 per barrel include higher geopolitical risks, deeper OPEC+ cuts and supply disruptions from key oil-producing regions. Major oil producer Iraq has been impacted by the conflict and any further escalation could hurt other major OPEC+ suppliers in the region.

SOURCE: Bloomberg

TECHNICAL REVIEW:

• SUPPORT AT $70: CRUDE OIL HAS TESTED $70 OR NEAR NINE TIMES SINCE NOVEMBER 2021. After testing the region, Crude oil would come back up above the mark of $70, to target the $80- $100 range.

Graph (Weekly): Crude Oil (November 2021- March 2024)

Please note that past performance does not guarantee future results.

Crude Oil, March 11, 2024
Current Price: 77.30

Example of calculation base on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 1000 units
2. Calculations for exchange rate used as of 09:30 (GMT) 11/03/2024
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