The Impact of Market Fluctuations on the Commodity Market

The Impact of Market Fluctuations on the Commodity Market

The commodity market is notorious for its constant fluctuations and struggles to maintain a steady upward momentum. Recently, on Thursday, the price of Brent crude oil experienced a significant drop to 83.60 USD per barrel. This downturn was preceded by a loss of nearly 1% in value on Wednesday evening, driven by concerns over lending costs.

Market discussions have been dominated by speculations regarding the Federal Reserve’s interest rates and the potential impact on demand for energy resources. The recent increase in the yield on US government bonds has not only affected the USD but has also exerted pressure on commodity assets, including oil. As a result, commodities are becoming less attractive to investors who transact in US dollars.

According to the American Petroleum Institute (API), recent statistics have shown a decrease in crude oil inventories in the US by 6.490 million barrels. Gasoline stocks have also seen a slight decrease, while distillate reserves have seen an increase. These figures have added to the uncertainties surrounding the commodity market, especially with the upcoming OPEC meeting looming.

Looking at the technical analysis for Brent crude oil, indicators suggest a potential for a new growth wave. On the H4 chart, Brent is expected to form a consolidation range above 82.55 before breaking out towards 84.70. This breakout could then lead to a short-term target of 86.50. Similarly, on the H1 chart, Brent is correcting towards 83.60 with a consolidation range below this level. An upward breakout from this range could signal a growth wave towards 85.00.

The commodity market is facing challenges due to market uncertainties and speculations surrounding lending costs and interest rates. The recent drop in oil prices and the impact on commodity assets are causing concerns among investors. However, technical analysis suggests the potential for a new growth wave in the near future. It is crucial for market participants to closely monitor these developments and adjust their strategies accordingly.

Technical Analysis

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