Crude Oil’s Slippery Path Amid Market Shifts | July 23, 2024
Crude oil prices have dropped for two sessions straight, hitting their lowest in over a month. Traders seem to be ignoring President Biden dropping out of the race and are more concerned about rising oil stockpiles and weaker demand. Even with tensions in the Middle East, the market’s reaction to Biden’s exit was expected and hasn’t caused much of a stir.
For months, the forecast has been that if crude stays above $70 on monthly closes, it could hit $90-$91 in the second half of the year. Right now, oil is below both the 50-day and 200-day moving averages, showing a bearish trend. Prices have been flat, indicating low volatility and a period of waiting for new developments.
In an election year, positive economic conditions are common. However, if oil drops below $70, it could fall to the low $50s. The best trades often come from risky price levels, even if they don’t seem safe at first.
Historically, crude oil has been volatile, with highs around $147 in 2008 and even negative prices during the pandemic. Currently, at about $80, it’s in a mid-range zone, showing a stable but range-bound market. Investors like volatile oil markets because they offer more trading chances.
In summary, while short-term trends are bearish due to higher stockpiles and weaker demand, the long-term outlook remains positive if crude stays above $70.