What Dominates Oil Movements?

What factors affect the movement of oil?

What is the next destination?

Oil prices are greatly affected by geopolitical developments and the level of global demand, with tensions in the Middle East region posing a major threat to global oil supplies, and playing a pivotal role in recent price movements. If the conflict in the region escalates and external parties intervene, this will lead to a significant rise in oil prices, as traders will evaluate the risks related to supplies in the Middle East, which is responsible for about a third of global production. In terms of global demand, OPEC reduced its growth expectations for the third year in a row, reducing expectations for 2024 from 2.1 million barrels per day to 1.93 million barrels per day, and for 2025 from 1.7 million barrels per day to 1.64 million barrels per day.

As for crude oil inventories, data for which were released on Wednesday, October 23, they rose to 5.5 million barrels, which is considered a negative signal for oil prices.

On the other hand, higher demand for oil remains linked to the recovery of the Chinese economy and improved economic performance in the United States, according to expert analysis.

Figure 1: What Dominates Oil Movements?, Crude Oil, Daily Frame, Tradingview

Technically, and on the daily time frame, the general trend of crude oil prices still indicates a continuous rise, as the next first target is located at the level of 76.23. On the other hand, the negative scenario remains linked to a decline in prices, especially if the market witnesses a daily close below the crucial support level at 66.98. Any new escalation in the Middle East region or the targeting of sensitive oil facilities would promote a rapid rise in oil prices towards the 76.23 level, according to the analyst’s technical analysis.