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Oil prices are not good, Europe saves the situation. What do you think about oil prices in the future?
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: Oil prices are not good, Europe saves the situation, what do you think of oil prices in the future?" Hope it will be helpful to you! The original content is as follows:
As the euro zone's strong economic activity data partially alleviated concerns about oversupply concerns, oil prices fell slightly and rebounded rapidly on Tuesday.
The price of U.S. crude oil futures contracts for November delivery fell 0.6% during the session to $61.85 per barrel, and then rebounded rapidly, and is currently up 1.17%, trading around 63.01. Oil prices have been affected by many factors, and the following are some news about the follow-up of recent factors.
Eurozone PMI data releases optimistic growth signals
A survey released on Tuesday showed that the eurozone business activity grew at its highest level in 16 months in September, adding hope to economic growth in the important energy consumption region.
The HCOB Eurozone www.xmtraders.comprehensive Purchasing Managers Index (initial value) www.xmtraders.compiled by S&P Global rose slightly from 51.0 in August to 51.2 in September, marking that the index has been in the expansion range for nine consecutive months. Generally speaking, a PMI value above 50.0 indicates that economic activity is in an expansion state, while a lower than 50.0 indicates that economic activity contracts.
The service industry is the main driving force for overall economic expansion, with the industry's PMI rising from 50.5 in August to 51.4, the highest in nine months and significantly higher than the expectations that institutions would remain the same as last month. However, the momentum of manufacturing has weakened, and its overall index fell from 50.7 in August to 49.5, entering a contraction range.
Similar PMI data from the United States will be released later that day, and the market expects that the data will show a slowdown in US economic growth.
It is worth noting that the cost inflation of the service industry, which the European Central Bank (ECB) closely monitored, has eased slightly, but it is currently fragile.Against the weak economic background, it is still at an abnormally high. But the cooling of product sales prices is even more significant, which may prompt the ECB to think about whether the possibility of interest rate cuts before the end of the year will be put back on the agenda.
Worries about global oversupply continue, curbing oil prices
Nevertheless, crude oil prices in Asia fell on Tuesday as Iraq and the Kurdish regional government reached a preliminary agreement on restarting an oil pipeline, which further exacerbated market concerns about oversupply.
After the agreement is reached, about 230,000 barrels of crude oil exports per day in Iraq's Kurdish region will be restored, which has been suspended since March 2023.
This follows Iraq announced on Monday that it has increased crude oil exports under the OPEC+ (OPEC+) agreement.
Overall, the global crude oil market is facing an increase in supply, which may lower oil prices.
The International Energy Agency (IEA) said in its latest monthly report that the growth rate of global crude oil supply will accelerate this year, and the surplus of the global crude oil market may further expand in 2026 as OPEC+ member countries increase production and crude oil supply increases in countries outside the organization.
However, there is one factor that provides some support for oil prices: the EU is preparing to introduce a new package aimed at strengthening restrictions on Russia's energy exports.
The measure is expected to target liquefied natural gas imports and will punish third-country intermediaries that facilitate Russian trade.
The United States has increased pressure on its allies, urging them to impose tariffs on goods from countries such as India in response to this continued purchase of Russian crude oil.
The situation in the Middle East is heating up, and the uncertainty of crude oil supply has increased boosted oil prices
If these sanctions can be effectively implemented, it may put pressure on global supply chains.
In addition, at the United Nations meeting on Monday, a broad coalition of multiple countries supported the formal recognition of the Palestinian state, a move that was opposed by Israel and the United States.
This diplomatic division has exacerbated uncertainty in the Middle East, where crude oil production accounts for one-third of the total global crude oil production.
At the same time, Ukraine has stepped up drone attacks on Russia's energy infrastructure, destroying several refineries earlier this month and forcing loading operations at a key port to be suspended.
The Ukrainian military said on Tuesday that it attacked two Russian oil distribution facilities in the Bryansk and Samara regions.
These attacks highlight the fragility of Russia's energy export route and also make the market wonder whether Russia's current crude oil production level can continue.
Technical Analysis
As mentioned in the article yesterday, the November futures contract of U.S. crude oil rebounded as scheduled based on the bottom of the box, oil prices reached a second bottom in the Asian period and rose in the European period.
FirstThe pressure level is at the integer mark of 63.00, which is at the intersection of the 10-day moving average and the 100-day moving average. The same is the 50% quarter of the decline on September 19. If oil prices develop downward, the first support will still look at the trading-intensive zone of 61.50. It is worth noting that the 61.50 integer mark has been tested three times this month. After crude oil reaches this position, it may fall below and lead to oil prices downward.
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