After a sharp fall from $85/bbl, BRN bulls have managed to rebound slightly and are now trying to stabilize at around the $80/bbl psychological threshold.
Previously feared supply threats are now moderately “cooling off” as the risk of a wider conflict, involving major regional oil producers, is slowly dissipating.
Oil bears may have been spooked by Saudi Arabia’s energy minister who spoke out against speculators.
The ball is on the demand side now as investors are wary that a potential global economic slowdown may negatively affect the demand for “black gold”.
The major economic signals coming from China – the world’s largest oil consumer, boosting the demand side fears include:
On the other side of the Pacific, a potential for the interest rates to be increased further down the road may be still on the Fed’s agenda.Resorting to another policy tightening may significantly undermine US economic activity, thus altering the demand for oil.From the technical perspective …
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