Home / Blog / Category / Fundamental Analysis / Crude Oil Prices Rise Amid Stronger Demand Expectations and Geopolitical Tensions
28 May 2024 | FXGT.com

Crude Oil Prices Rise Amid Stronger Demand Expectations and Geopolitical Tensions

Current Performance: U.S. crude futures increased on Tuesday, boosted by expectations of stronger fuel demand as Memorial Day weekend marked the start of the summer driving season. West Texas Intermediate (WTI) crude is currently up 1.38% for the week, trading above at $79 a barrel.

Summer Driving Season: The start of the U.S. summer driving season is traditionally associated with higher fuel demand. Early signs point to relatively strong level of holiday travel, contributing to the rise in crude prices. However, gasoline consumption may be tempered by the increasing prevalence of electric vehicles.

Middle East Conflict: Prices are also supported by heightened geopolitical risks following an Israeli airstrike that resulted in civilian casualties in Rafah and a cross-border clash that left an Egyptian officer dead. Such events typically increase concerns about potential disruptions to oil supply, supporting higher prices.

Technical Levels: The bullish momentum faces a critical test at the $80.00 resistance level. Breaking above this could signal further gains, while failure to do so may see prices consolidate or pull back to the recent range area between $80 and $77.

Inventory Data: Traders are focused on US weekly barrel inventory counts from both the American Petroleum Institute (API) and the Energy Information Administration (EIA), due on Wednesday and Thursday, respectively. Last week saw an unexpected buildup in US crude oil supplies. However, market forecasts for this week predict a decline, with EIA weekly barrel counts expected to decrease by two million barrels.

U.S. PCE Price Index: The market is closely watching the U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, which is due for release on Friday. This data could influence the Federal Reserve’s future monetary policy decisions.

OPEC+ Production Cuts: The Organization of the Petroleum Exporting Countries (OPEC) and its extended network, OPEC+, are broadly expected to maintain voluntary production cuts. These cuts, initially adopted in 2023, aim to prop up global crude oil prices amid increasing US production that outpaces demand. The upcoming OPEC+ meeting on Sunday, June 2nd will be closely watched for any decisions on production limits.

Help us improve this article.
Disclaimer: Any material and information included herein are intended for general marketing purposes only and does not constitute investment advice or recommendation nor an invitation to acquire any financial instrument and/or be involved in any financial transaction. The investor is solely responsible for the risk of his investment decisions and if considers appropriate, he should seek relevant independent professional advice before making any decision. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. Please read full Non-Independent Investment Research Disclaimer here. Risk Disclosure: CFDs are complex instruments and carry a high level of risk of losing money. Read full Risk Disclosure here .

Blog Search

Categories

Blog Categories

Tag

Blog Tags

Register and Share Buttons EN

Register

Loved our latest article?

Share it with your friends and followers!

Copied to clipboard
To top

Leveraged products may not be suitable for everyone and may result in loss of all your capital. Please ensure you fully understand the risks involved and whether trading is appropriate for you. Read Full Risk Disclosure here.