international oil markets, prices continued upward trajectory on Tuesday as investors remained cautious ahead of upcoming announcements regarding interest rates and inflation data. Although, concerns about an excess supply and slow demand expansion served as barriers.

CFDs on Brent Crude oil posted an intraday high of $76.61 and intraday low of $75.97. Oil is currently trading at $76.38 (1:01pm Tuesday, 12 December 2023 (GMT+5) Time in Pakistan).

CFDs on WTI Crude Oil posted an intraday high of $71.92 and intraday low of $71.30. Oil is currently trading at $71.68 (1:01pm Tuesday, 12 December 2023 (GMT+5) Time in Pakistan).

FED AND INFLATION CONCERNS LOOM

Moreover, it is anticipated that the Federal Reserve will maintain interest rate stability, additional tightening may be necessary if inflation is still a concern.

This possibility was hinted at in the Fed’s November minutes suggesting rate increases might continue if inflation did not decline.

Meanwhile, if inflation begins to decline, the Fed may decide to lower interest rates in 2024.

OIL LOOKS INTERESTING – TECHNICAL ANALYSIS

GEOPOLITICAL CONCERNS

Heightened regional tensions, recent geopolitical events, like the missile attack on a chemical tanker in the Red Sea by the Houthi rebels in Yemen, have complicated the oil market.

SHIP OIL TRANSIT ROUTES

This remains the the main concern as Ship safety in one of the main oil transit routes in the world.

Furthermore, there is growing scepticism regarding the efficacy of OPEC+’s planned output cut of 2.2 million bpd in early 2024. This is because of the expected excess supply from non-OPEC countries.

OIL ANALYSIS 

WTI and Brent currently display a contango market structure, meaning that during the first few months of 2024, upcoming contracts will be worth less than those that are later in date.

This may indicate that investors believe there is a glut of crude available at this time rather than a decrease in demand or surplus supply.

When OPEC and the International Energy Agency publish their monthly reports on the oil market, the oil market looks forward to learning new things about the fundamentals.

Nevertheless, focus is on the COP28 negotiations, where an alliance of more than 100 nations is trying to overcome OPEC members in order to reach an accord that would ultimately mark the end of the oil era.

 

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