Oil is losing nearly 2% today, after 6 days of virtually uninterrupted gains, supported mainly by the escalating geopolitical tensions in the Middle East. Today's strong declines in China, where the CHN.cash contract is losing almost 10%, due to the disappointing lack of further communication on economic stimulus measures and the lack of escalation of tensions in the Middle East have caused investors to take profits.
- China indicated today that it was confident of 'meeting targets' for economic growth, which somewhat disappointed markets building up great expectations about the impact of stimulus packages on potentially outperforming forecasts. As a result, investors are beginning to re-examine whether 'stimulus' will seriously lift oil demand in China.
- In addition, despite the ongoing Israel-Hezbollah military operations, the market still sees only limited chances for a major shake-up in the Middle East (at least not before the U.S. elections). As a result, some of the geopolitical premium after oil's biggest rally since 2023 may evaporate, while Israel's military response to an Iranian attack has been postponed to an unknown future.
- On the other hand, some short-term support for oil prices could potentially come from Hurricane Milton, which has been upgraded to hurricane scale 5 and could cause short-term production outages in the Gulf of Mexico. Investors are awaiting today's API report, which estimates a 1.9 million barrel increase in oil inventories.
Oil is retreating below $80 per barrel today, but the trend is still clearly upward; a rise above $80 could pave the way for another upward momentum.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
