- Oil prices are trading in tight ranges as traders head into the Christmas holidays.
- Markets are taking no stance despite some headlines about more stimulus in China, a major global consumer.
- The US Dollar Index is trading just below a two-year high as volatility eases.
Crude oil prices are starting to see volatility ease on Tuesday as traders look ahead to Christmas Eve rather than the American Petroleum Institute (API) release. Even headlines about more stimulus in China aren’t boosting oil prices: Chinese policymakers want to boost the economy with a 3 trillion yuan bond injection, a move that should boost spending and result in rising inflation. demand for oil from one of the world’s main consumers.
The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against a basket of currencies, is just below a two-year high. The Dollar sees volatility decrease in these last hours of trading before Christmas. With its current position, it could still reach a new two-year high before the end of the year.
At the time of writing, Crude Oil (WTI) is trading at $69.63 and Brent Crude at $72.84.
Oil News and Market Movements: No Big Waves
- Policymakers in China plan to sell a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025. The government seeks to support consumption subsidies, business equipment upgrades, as well as technology investments. key and advanced manufacturing sectors, according to Reuters.
- India’s state oil refiners are having difficulty buying the volume of Russian crude they need, people familiar with the matter told Bloomberg.
- Methane emissions in the US Permian oil basin fell 26% last year as companies adjusted operations and deployed new technology to stop leaks of the potent greenhouse gas, according to a study by S&P Global Commodity Insights.
- At 21:30 GMT, the American Petroleum Institute (API) will publish its weekly crude oil reserve change number. The previous week was a reduction of 4.7 million barrels.
Oil Technical Analysis: Moderate Action
Crude oil prices are not rising significantly despite headlines that China is set to boost its local demand with a massive 3 trillion yuan (CNH) injection. This should be beneficial for local oil demand, as China is one of the world’s largest consumers. The fact that the stimulus plan still needs to be further outlined and that several market participants are not trading on Tuesday makes a big move in oil prices highly unlikely.
Looking up, the 100-day SMA at $70.76 and $71.46 (Feb. 5 low) act as nearby firm resistance levels. If more tailwinds emerge in support of oil, the next crucial level will be $75.27 (Jan 12 high). However, be wary of taking quick profits as the end of the year quickly approaches.
On the downside, $67.12 – a level the price held in May and June 2023 and during the final quarter of 2024 – remains the first solid support nearby. Should it break, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the 2023 low.
WTI Crude Oil Daily Chart
WTI Oil FAQs
WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, one of the three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing facility, considered “the pipeline junction of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.
Like all assets, supply and demand are the main factors that determine the price of WTI oil. As such, global growth can be a driver of increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter supply and impact prices. The decisions of OPEC, a group of large oil-producing countries, is another key price factor. The value of the US Dollar influences the price of WTI crude oil, as oil is primarily traded in US dollars, so a weaker Dollar can make oil more affordable and vice versa.
Weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect the fluctuation of supply and demand. If the data shows a decline in inventories, it may indicate an increase in demand, which would drive up the price of oil. An increase in inventories can reflect an increase in supply, which drives down prices. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, with a difference of 1% between them 75% of the time. EIA data is considered more reliable since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide member countries’ production quotas at biannual meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC member countries, including Russia.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
