Oil and gas rally stalls on profit-taking
2023-10-31
Summary:
Oil prices rebounded on Tuesday, recovering from a 3% drop the previous day. Concerns about supply disruptions due to the Israel-Hamas conflict eased.
Oil rallied on Tuesday. Crude fell more than 3% the previous session as Israels attacks on Gaza escalated although fears eased that the Israel-Hamas war would disrupt supply from the region.
Israel expanded its military incursion deeper into the northern part of the Gaza Strip though the largest convoy of humanitarian aid to arrive in the region still fell far short of needs.
Crude prices could rise to more than $150 a barrel if the conflict in the Middle East escalates, the World Bank warned. In a worst-case scenario, global oil supply could shrink by 6 to 8 million bpd.
But under the bank’s baseline forecasts, global oil prices are predicted to average $90 a barrel in the fourth quarter and $81 in 2023 as slowing growth eases demand.
Hedge funds and other money managers sold the equivalent of 14 million barrels in the six most important petroleum futures and options contracts over the seven days ending on 24 Oct.
Meanwhile, those players were still struggling to become outright bullish about the outlook for US gas despite futures prices being very low in real terms.
A retracement continues in natural gas following fresh bearish reversal candle. Hitting a high last week led to a correction with the 200 EMA as support.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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