Brent - Will stability return to the region?!Brent oil is located between EMA200 and EMA50 in the 4H time frame and is moving in its downward channel. We will look for oil buying positions on the midline of the ascending channel. In case of a valid failure of this channel, we can witness the continuation of the upward trend. On the other hand, within the supply zone, we can make short-term sales with appropriate risk reward.
China has announced plans to implement a “relatively accommodative” monetary policy. This announcement, accompanied by promises of support for more “active” fiscal policies, signals Beijing’s intention to further ease economic conditions. The news drew significant market attention, resulting in a 6% rise in the value of Chinese investment funds on U.S. stock exchanges. Similarly, the Australian dollar gained notable strength in currency markets, and commodity prices saw an uptick.
Meanwhile, according to Bloomberg sources, Chinese drone manufacturers have recently imposed restrictions on exporting key components used in drone production to the United States and Europe. This move strongly suggests that Beijing is unwilling to exert pressure on Moscow to end the war.
On another front, Donald Trump, the U.S. President-elect, announced after meeting with Ukrainian President Volodymyr Zelensky over the weekend that he is making serious efforts to end the war.Writing on his social media platform, Truth Social, Trump stated, “A ceasefire must be declared immediately, and negotiations must begin.” He added, “I know the President of Russia well. Now is the time for him to act. China can help. The world is watching!”
Simultaneously, the Biden administration, with Trump’s backing, is working to secure a ceasefire agreement and the release of hostages in Gaza before Trump’s inauguration on January 20. The negotiations have resumed swiftly and discreetly, with close coordination between Biden’s and Trump’s teams. Steve Witkoff, Trump’s newly appointed envoy to the Middle East, is playing a pivotal role in these talks.
Trump has demanded the release of hostages before his inauguration, warning that otherwise, “hell will break loose in the Middle East.” Biden administration officials have welcomed Trump’s support and are striving to ensure a smooth transition between the two administrations. Adam Boehler has been appointed as the lead official for hostage affairs and is expected to play an active role in Gaza negotiations.
Meanwhile, Goldman Sachs anticipates that OPEC+ production will remain data-dependent. The bank expects OPEC+ to increase production for four consecutive months starting in July, coinciding with strong summer demand. Additionally, Goldman Sachs predicts that India’s oil demand will grow by 0.3 million barrels per day next year.
According to the U.S. Energy Information Administration (EIA) in its latest Short-Term Energy Outlook (STEO), U.S. crude oil production is forecast to reach 13.24 million barrels per day this year and 13.52 million barrels per day next year. The EIA has also revised its 2024 price forecasts for Brent and WTI crude oil downward, projecting $76.51 per barrel for Brent and $80.49 per barrel for WTI. These figures are lower than last month’s forecasts of $77 and $80.95 per barrel, respectively.
U.S. crude oil inventories rose by 0.499 million barrels in the week ending December 6, 2024, following a 1.232 million barrel increase the previous week. According to the API Weekly Statistical Bulletin, this marks the fifth increase in eight weeks, defying market expectations of a 1.3 million barrel draw.
