Crude Oil Week Ahead: After OPEC’s fifth downward revision for 2024 oil forecasts and additional cuts for 2025, crude oil prices stabilized near their 4-year support zone, buoyed by China’s stimulus commitments and significant Middle East reforms. Will it hold on FOMC week?
By : Razan Hilal, CMT, Market Analyst
The Chinese economy remains in focus as markets await updates on oil demand expectations for 2025. Industrial production, retail sales, and new loan data will indicate whether China’s 2024 stimulus efforts have gained traction. Although Chinese equities declined last week after statements that upcoming stimulus measures will mirror previous ones, oil prices climbed above the $70 mark, signaling optimism.
Click the website link below to get our exclusive Guide to oil trading in Q4 2024.
cityindex.com
Chinese economic data, OPEC production, and the outcome of the US election will be the key factors to watch in Q4.
Meanwhile, October PMI data highlighted a bearish outlook for manufacturing and services sectors, keeping oil prices near their 4-year lows. The upcoming flash PMIs for the Eurozone, UK, and US this week may introduce additional volatility risks to currencies like the EUR, GBP, and USD, potentially impacting oil markets.
In addition to the positive impact of China’s policy stance, Trump has vowed to address ongoing Middle East conflicts, threatening harsh measures if resolutions are not reached before his presidency resumes. This has escalated tensions in the region, including the weakening of Iranian proxies and the recent fall of the Assad regime in Syria. These developments increase hedging risks for commodities including oil until concrete resolutions are achieved.
The Federal Reserve’s final rate decision for 2024 is expected to include a 25bps rate cut, reflecting a cautious approach to economic uncertainties in 2025. Despite a recent rise in CPI and PPI data, with US CPI m/m increasing from 0.2% to 0.3% and y/y from 2.6% to 2.7%, the FOMC outlook will likely dominate market sentiment. Traders are looking for insights into 2025 policy shifts ahead of Trump’s presidency, making this week’s Fed decision pivotal.
Source: Tradingview
Crude oil prices remain confined within a narrow range, oscillating between $66 and $72. The market’s next move hinges on whether the current support zone holds or gives way. Here are two potential scenarios:
Scenario 1: The bearish breakout from the triangle suggests a move toward the full triangle target, aligning with the 0.618 Fibonacci retracement level of the 2020–2022 uptrend at 55. This scenario also aligns with the lower boundary of the down-trending channel, which has been respected and extended from the yearlong triangle pattern. A firm break below 64 can extend the drop towards 58 and 55.
Scenario 2: If the current support zone holds and bullish fundamentals come into play, the first resistance (above 72 and 72.70) could be met at the triangle’s thrust point (where its borders converge) near $78. Further resistance levels could follow at 80, 84, and 88, potentially extending the uptrend toward longer-term targets at 95 and 120.
— Written by Razan Hilal, CMT on X: u/Rh_waves
cityindex.com
Crude Oil Week Ahead: After OPEC’s fifth downward revision for 2024 oil forecasts and additional cuts for 2025, crude oil prices stabilized near their 4-year support zone, buoyed by China’s stimulus commitments and significant Middle East reforms....
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
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By : Razan Hilal, CMT, Market Analyst
Key Events
- China: Retail Sales and Industrial Production on Monday, New Loans on Friday
- Flash PMIs: Manufacturing and Services data for the Eurozone, UK, and US on Monday
- FOMC Meeting: Final 2024 decision on Wednesday
- Geopolitical Risks: Middle East reformations and rising tensions
China and PMIs
The Chinese economy remains in focus as markets await updates on oil demand expectations for 2025. Industrial production, retail sales, and new loan data will indicate whether China’s 2024 stimulus efforts have gained traction. Although Chinese equities declined last week after statements that upcoming stimulus measures will mirror previous ones, oil prices climbed above the $70 mark, signaling optimism.
Click the website link below to get our exclusive Guide to oil trading in Q4 2024.
Oil Q4 2024 Market Outlook - City Index AU
Chinese economic data, OPEC production, and the outcome of the US election will be the key factors to watch in Q4.
Meanwhile, October PMI data highlighted a bearish outlook for manufacturing and services sectors, keeping oil prices near their 4-year lows. The upcoming flash PMIs for the Eurozone, UK, and US this week may introduce additional volatility risks to currencies like the EUR, GBP, and USD, potentially impacting oil markets.
Geopolitical Tensions Ahead of a Trump Presidency
In addition to the positive impact of China’s policy stance, Trump has vowed to address ongoing Middle East conflicts, threatening harsh measures if resolutions are not reached before his presidency resumes. This has escalated tensions in the region, including the weakening of Iranian proxies and the recent fall of the Assad regime in Syria. These developments increase hedging risks for commodities including oil until concrete resolutions are achieved.
US Data and FOMC
The Federal Reserve’s final rate decision for 2024 is expected to include a 25bps rate cut, reflecting a cautious approach to economic uncertainties in 2025. Despite a recent rise in CPI and PPI data, with US CPI m/m increasing from 0.2% to 0.3% and y/y from 2.6% to 2.7%, the FOMC outlook will likely dominate market sentiment. Traders are looking for insights into 2025 policy shifts ahead of Trump’s presidency, making this week’s Fed decision pivotal.
Technical Analysis: Quantifying Uncertainties
Crude Oil Week Ahead: 3Day Time Frame
Source: Tradingview
Crude oil prices remain confined within a narrow range, oscillating between $66 and $72. The market’s next move hinges on whether the current support zone holds or gives way. Here are two potential scenarios:
Scenario 1: The bearish breakout from the triangle suggests a move toward the full triangle target, aligning with the 0.618 Fibonacci retracement level of the 2020–2022 uptrend at 55. This scenario also aligns with the lower boundary of the down-trending channel, which has been respected and extended from the yearlong triangle pattern. A firm break below 64 can extend the drop towards 58 and 55.
Scenario 2: If the current support zone holds and bullish fundamentals come into play, the first resistance (above 72 and 72.70) could be met at the triangle’s thrust point (where its borders converge) near $78. Further resistance levels could follow at 80, 84, and 88, potentially extending the uptrend toward longer-term targets at 95 and 120.
— Written by Razan Hilal, CMT on X: u/Rh_waves
Crude Oil Week Ahead: China, PMIs, and FOMC Meeting
Crude Oil Week Ahead: After OPEC’s fifth downward revision for 2024 oil forecasts and additional cuts for 2025, crude oil prices stabilized near their 4-year support zone, buoyed by China’s stimulus commitments and significant Middle East reforms....
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
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