{"id":78437,"date":"2024-03-21T15:35:47","date_gmt":"2024-03-21T13:35:47","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=78437"},"modified":"2025-12-17T15:28:52","modified_gmt":"2025-12-17T13:28:52","slug":"oil-outlook-temporary-correction-lower","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/nl\/oil-outlook-temporary-correction-lower\/","title":{"rendered":"Oil Outlook: Temporary correction lower?"},"content":{"rendered":"

WTI bulls seem to have continued to push the commodity\u2019s price higher and despite a correction lower yesterday and today, WTI\u2019s price are still higher than our last report.<\/a> For the time being, we intend to have a look at the conditions in the US oil market yet also have a look at the supply and demand sides of the international oil market. In this report, we aim to shed light on the catalysts driving WTI\u2019s price, assess its future outlook and conclude with a technical analysis.<\/p>\n\n\n\n

Oil: Overview Report<\/strong><\/h2>\n\n\n\n

US oil market remains tight<\/strong><\/h3>\n\n\n\n

Making a start with the conditions in the US oil market, we have to note that the number of active US oil market increased according to Baker Hughes by 6. The increase of active oil rigs in the US tends to imply that demand is on the rise, especially if one considers that active oil rigs have been increasing the past four-five weeks. API on the other hand, reported that US oil inventories continued to drop, in the past week by -1.519 million barrels with the release implying that aggregated demand surpassed production levels, thus that the US oil market remains tight after prior week\u2019s readings first reversed the slack reported in the past month in the US oil market. <\/p>\n\n\n\n

It should be noted that EIA\u2019s crude oil inventories figure reaffirmed the tightness of the US oil market, by reporting also a drawdown, this time of -1.952 million barrels. Should next week\u2019s readings reaffirm the US oil market\u2019s tightness we may see oil prices getting some support. <\/p>\n\n\n\n

The Fed\u2019s decision <\/strong><\/h3>\n\n\n\n

On a deeper fundamental level, we note the Fed\u2019s interest rate decision. The bank as was widely expected remained on hold and seemed to verify that rate cuts are coming. Yet in its accompanying statement, the bank also showcased some hesitancy in cutting rates. Furthermore, the new dot plot verified the market\u2019s current expectations for a total of three rate cuts in the year which also tended to weigh on the USD. <\/p>\n\n\n\n

So on the one hand, the weakening of the USD tends to usually support oil prices, given that the commodity is primarily denominated in US Dollars. Also, the possibility of easing financial conditions could improve economic activity thus increasing demand for oil. Both of the prementioned factors tended to be supportive of oil prices. On the other hand, the bank\u2019s hesitation to start cutting rates may imply a prolongment of tight financial conditions in the US economy and could have weighed a bit on oil prices.    <\/p>\n\n\n\n

Is Russian supply tightening of loosening?<\/strong><\/h3>\n\n\n\n

As the last fundamental issue on an international level this time, we note the situation with Russian oil exports. Reports surfaced at the beginning of the week that Russian exports of oil for March are expected to have increased by 10% on a daily basis, if compared to the initial plans. Increased exports seem to be going out from the country\u2019s Baltic ports. <\/p>\n\n\n\n

On the flip side, we highlight the Ukrainian drone attacks against Russian refineries, which may curtail oil supply on an international level. Also please note that US sanctions on Russian oil seem to be taking place as Reuters reported that India’s Reliance Industries, operator of the world’s biggest refining complex, will not buy Russian oil loaded on tankers operated by shipper Sovcomflot (SCF) after recent U.S. sanctions. <\/p>\n\n\n\n

The news tended to highlight the prospect for additional tightening of the supply side of the international oil market and should such headlines intensify in the coming week, we may see them supporting oil prices fundamentally.<\/p>\n\n\n\n

Oil: Technical Analysis<\/strong><\/h2>\n\n\n\n

WTI Daily Chart<\/strong><\/h3>\n\n\n\n
\"EU\/USD<\/figure>\n\n\n\n