USOIL Upbeat on Geopolitical Jitters
Ukraine Jitters
This week we have seen some escalation in rhetoric by Western countries and Russia over the war in Ukraine, while hopes for a peaceful solution have subsided.
As per BBC's reporting, Russian President Putin will continue what he calls "special operations", while negotiations with Ukraine have reached a dead end [1]. US President Biden called Mr Putin a "dictator" yesterday, while speaking on his efforts to lower energy cost for Americans and talked of genocide, accusing him of "genocide".
UK Foreign Secretary Ms Truss had twitted that there are reports for use of chemical weapons by Russian forces on Mariupol and that "We are working urgently with partners to verify details". [3]
China Covid-19 Developments
Markets also continue to monitor the Covid-19 situation in China, which is the world's second largest consumer of oil. Reuters had reported that Shanghai has eased some lockdown measures, classifying certain areas as lower-risk, but cases saw another increase on Tuesday. [4]
The Chinese mainland reported 1,500 new locally transmitted COVID-19 cases and 26,525 new asymptomatic carriers (local & imported) for April 12. Shanghai had 1,189 carriers with symptoms (from 994 in the previous day) and 25,141 asymptomatic (from 22,348 in the previous day). [5]
OPEC Monthly Report
The Organization of the Petroleum Exporting Countries (OPEC) released its latest monthly oil report this week, in which it downgraded the oil demand forecasts. In particular, world oil demand is projected to average 100.5 million barrels/day, which is 0.4 million barrels/day lower than the previous month's estimates. [6]
Total OPEC (13) crude oil production averaged 28.56 million barrels/day in March 2022, higher by 57K barrels/day month-over-month.
USOil Analysis
Sour sentiment over the war in Ukraine and reported easing of lockdowns in Shanghai helped the commodity defend the ascending trendline from December's lows, which runs its second straight profitable day, aspiring to stop the two-week slide.
It tries to leave the descending trendline from last month's multi-year highs and the EMA200 behind it, which would pause the near-term downside bias. This would allow it to push towards 108.77, but we are cautious at this stage and 116.66 seems distant.
As long as it does not clear the aforementioned confluence, its is in danger of renewed pressure and fresh month lows (92.91), but a catalyst will likely be required to send it towards 85.42-84.00.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 13 Apr 2022 https://www.bbc.co.uk/news/world-europe-61077648 | |
| Retrieved 13 Apr 2022 https://twitter.com/trussliz/status/1513636563405713416 | |
| Retrieved 13 Apr 2022 http://english.www.gov.cn/statecouncil/ministries/202204/13/content_WS6256622dc6d02e53353293fd.html | |
| Retrieved 13 Apr 2022 https://www.reuters.com/world/asia-pacific/shanghai-lets-some-residents-leave-home-cautiously-eases-covid-curbs-2022-04-12/ | |
| Retrieved 12 Apr 2026 https://www.opec.org/opec_web/en/publications/338.htm |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.