FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
91%
HFM information and reviews
HFM
89%

US Oil: Is it about to blow up?


7 November 2022

Crude oil prices fell below $80 in week 43, and commuters all over the world saw hope of relief at the pumps. But that short-term bearish run came to a quick end, and it now seems it’s a little too early for optimism. US Oil is already crawling toward the $90 mark, and there are three very influential things happening right now. Politics behind the chart patterns are about to make oil trading a tricky but exciting asset worth watching in the coming weeks. But before you hit the buy or sell button on US Oil, consider who is pulling the strings and why.

Biden behind the barrels

Currently, the U.S. presidency is democratic, and the U.S. Senate is marginally democratic too. This means whenever the Biden administration wants to pass laws, they have a good chance of succeeding. But here come the midterm elections, and the Democrats need to put on a good show. In the last three months, Biden and the Federal Reserve, has done a lot to reduce the prices of oil with the aim to lower the prices at the pumps… and they’ve been telling this to every microphone and camera pointing their way. 

But will his initiatives make a difference? After all, there's still a vast supply and demand problem. 

Strategic Oil Reserves

Strategic Oil Reserves are set aside and can only be used in times of war... usually. That Biden is talking about releasing some of those reserves indicates the gravity of the situation. Last week, the Biden administration announced plans to release up to 15 million barrels of oil from the U.S. Strategic Reserves. At first glance, this might seem like positive news that could lower prices, but the reality is somewhat less impressive. 

Saudi Arabia alone produces over 10 million barrels per day for OPEC… every day! Biden’s 15 million barrels are nothing more than a publicity stunt, and he hasn’t done it yet. What’s he waiting for? Consider the words all the Tier-1 media are using. Biden has “announced” the release of strategic reserves. “announced.”

The U.S. is already on shaky economic ground, and releasing 15 million barrels when the price is low would be a big loss for the U.S. After all, nobody buys high and sells low. Which means we’ll need to see a significant rise in oil prices before America will consider releasing its tiny reserves into the oil market.

The Organization of the Petroleum Exporting Countries

Founded in 1960 with headquarters in Austria, OPEC is the world’s biggest oil producer. Currently, OPEC production is around 31 million barrels per day. Biden’s 15 million is a drop in the ocean when we look at the big picture. OPEC has all the keys to every door. Even oil companies are at their mercy. The 13 nations won’t let prices stay low for long, and there’s nothing Biden or anyone can do to stop them.

The common tactic used for decades by OPEC and the big oil companies is to simply pause the pumps. By producing less oil, the scarcity affect raises the price per barrel. We all felt this years big cut while filling our tanks. When OPEC strangles the supply, every nation suffers withdrawal symptoms, stations run dry, and countries cave in to higher prices.

OPEC then opens the taps to serve the global addiction, and the world sighs in “expensive” relief. Today, OPEC supplies about 30% of global oil needs, and, for the most part, they have monopoly on that dwindling energy source.

Trading US Oil in Q4 2022

So which way is US Oil going in the coming weeks? Q1 of 2022 saw a long rally that started at $66 per barrel and maxed at $124. A truly epic bull. But oil went into decline in June and only now shows signs of a reversal. Will Crude Oil rebound? How high might it go? Summarizing three major factors, a bullish forecast seems obvious.

Now imagine what could happen to the oil market if all three price strategies collide? Volatility may well be epic, with prices as high as $130 in the coming weeks, and daily price swings large enough to wipe out trading accounts are a real risk as big investors jump in and out. If you’re trading US Oil, you’d be wise to take advantage of every protection feature that Exness offers. From Price Volatility Protection to Custom Stop Out Level, you’ll need every tool Exness offers to trade US Oil. Check the US Oil chart today, and see if a reversal is underway. Be ready for the bull, but be wary of its horns.

#source

Share: Tweet this or Share on Facebook


Related

XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP
XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP

Gold price pulls away from a fresh multi-month top amid a modest US Dollar strength. Bets for smaller rate hikes by Federal Reserve, recession fears should help limit losses...

26 Jan 2023

Microsoft: Still Trapped Within Descending Channel
Microsoft: Still Trapped Within Descending Channel

Microsoft Corp., an American multinational technology conglomerate currently ranked the third largest company by market capitalization ($1.728T) which actively engages...

24 Jan 2023

Same story new week
Same story new week

Chinese New Year celebrations – many centres are closed in Asia. Treasuries sagged to end on a bearish week. USDIndex at 101.30 low as the market continued...

23 Jan 2023

EUR is stuck consolidating
EUR is stuck consolidating

EURUSD is going to consolidate. The current quote is 1.0810. In the nearest future the EUR might experience some local pressure because the weather in Europe has changed...

20 Jan 2023

EURGBP Fails To Break 0.89
EURGBP Fails To Break 0.89

In today’s European session, Germany’s final CPI rate for December registered 8.6% on an annual basis, in line with market expectations and the previous value...

18 Jan 2023

XAUUSD: Weekly Review 16-20 January 2023
XAUUSD: Weekly Review 16-20 January 2023

Gold jumped to start 2023 with strong gains, as the positive momentum from December carried over into the new year. Last year’s headwinds, particularly the strengthening...

17 Jan 2023


Editors' Picks

FXCM information and reviews
FXCM
87%
ActivTrades information and reviews
ActivTrades
86%
RoboForex information and reviews
RoboForex
85%
MultiBank Group information and reviews
MultiBank Group
84%
Libertex information and reviews
Libertex
83%
Vantage information and reviews
Vantage
83%

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.