Oil Price Prediction – Oil Tries To Settle Above The $90 Level
- WTI oil rebounds at the start of the week.
- Risk appetite is strong, and traders ignore recession fears.
- Weak dollar provides additional support to oil prices.
WTI Oil Starts The Week On A Strong Note
WTI oil is moving higher at the start of the week as traders bet on a rebound after the recent sell-off. The appetite for risk is growing, which is bullish for oil markets. Meanwhile, the U.S. dollar found itself under pressure, which served as an additional positive catalyst for WTI oil.
Geopolitical factors had little impact on oil today. China continues its military drills near Taiwan, but markets do not expect that these drills will lead to a real conflict.
At this point, traders are more sensitive to economic news rather than geopolitical news. Recession fears pushed oil towards the $90 level, but the recent rally in U.S. stock markets indicates that many traders believe that the economy is strong enough to support solid demand for energy.
What’s Next For WTI Oil?
WTI oil is down by more than 25% from the highs that were reached back in June. Most likely, the major pullback will attract some speculative traders who are willing to bet on a rebound towards the $100 level.
Recession fears, Fed tightening, and sales from the strategic reserve have contributed to the recent pullback. In the upcoming months, the price of oil will remain in political crosshairs as it is a major contributor to inflation.
The key question is whether lower oil prices will lead to higher demand despite recession fears. In case these fears are overblown, we will see signs of stronger demand in the upcoming oil market reports from EIA. If traders realize that the situation in the economy is not bad, oil may quickly get to the test of the $100 level.
For a look at all of today’s economic events, check out our economic calendar.