What Is Fueling the New Crude Oil Rebound?
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After the weekend, crude oil prices moved away from their lowest in twelve months. The cold snap that boosts energy demand is taking precedence over concerns about global growth.
Supply and Demand
WTI crude oil is trading near the $75 mark on the NYMEX after testing its $70 support level yesterday. Keystone, one of the main pipelines operated by TC Energy (NYSE:TRP) that can carry about 0.6 million barrels from Alberta (Canada) to the US, has been undergoing maintenance since Wednesday after a critical leak was detected in Kansas.
Keystone Spill: TC Energy Pipeline Is Now Biggest US Oil Leak Since 2010 — Bloomberg
On the other hand, the easing of COVID restrictions in China and Hong Kong gives hope for a rebound in the economy. According to Goldman Sachs in a report published on Sunday (Dec 11), the reopening in China could push crude oil prices up by $15. A jump in both domestic and international flights in China is to be noticed. Similarly, the removal of a three-day monitoring period for arrivals in Hong Kong marks a shift in health restrictive policies.
Weather
Another element capable of restoring momentum to the market is the degraded weather conditions in the northern hemisphere – also likely to fuel demand.
Firstly, in Europe, a mass of cold air from the Arctic brought temperatures down several degrees below seasonal averages. Secondly, in the United States, a cold front will sweep through much of the East, with negative temperatures forecast in Chicago, Cleveland, and Indianapolis.
Technical Charts
Crude Oil Futures Daily Chart
Crude Oil Futures 4-Hour Chart
RBOB Gasoline Futures Daily Chart
CFDs on Brent Crude Oil Daily Chart
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The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data’s accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits’ employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
