- Oil prices are generally sideways on Monday, erasing gains from the early Asian session.
- Following the release of tender PCE inflation, markets are pushing stocks and commodities higher.
- The US dollar index remains unchanged near its highest level in two years.
Oil prices consolidate on Monday, with WTI hovering above $69, with some upside potential as market sentiment improves, helped by broad tailwinds from Asian equities. The improvement in market sentiment followed Friday’s U.S. personal consumption expenditure (PCE) inflation data, which reopened the door to two or more rate cuts in 2025 by the Federal Reserve. This is the perfect enabler of higher risk in which stocks and commodities can thrive.
The U.S. Dollar Index (DXY) – which measures the performance of the US dollar (USD) against a basket of currencies – is rather flat, failing to outperform anything ahead of the Chicago Fed’s domestic activity index for November and the consumer confidence release for December. Given the low risk in the markets, the US dollar is expected to remain rather stable. Traders will want to hold tiny positions as moves may be short-lived and could involve quick profit-taking ahead of Christmas.
At the time of writing, crude oil (WTI) was trading at $69.76 and Brent crude was trading at $72.94.
Oil News and Market Insiders: Headlines Reduced
- The amount of crude oil stored on tankers that have been stationary for at least seven days increased to 70.20 million barrels as of December 20, according to Vortex data, Bloomberg reports. This represents an enhance of 7% compared to last week.
- Recent EU sanctions on Russian oil ships are being circumvented through Bulgaria, Romania and Turkey, Zerohedge published in a special report on Monday.
- President-elect Donald Trump sharply criticized Panama during a weekend rally for saying the country charges exorbitant tolls to travel through the key waterway, Bloomberg reports.
- Due to the Christmas holidays, the Energy Information Administration’s weekly publication on changes in US crude oil inventories will appear on Thursday at 16:00 GMT.
Oil Technical Analysis: Respect the Time Horizon
Oil prices may see a modest enhance, supported by broad risks related to unfavorable market conditions. Experienced traders will know that from Monday to January the rule of thumb is to hold smaller positions and take profits possibly even before the end of the same trading day. This means that any increases that may occur in Oil in the coming days should be approached with caution as they may be very short-lived.
Looking higher, the 100-day uncomplicated moving average (SMA) at $70.79 and $71.46 (February 5 low) is a sturdy resistance level nearby. If further positive tailwinds emerge to support crude oil, the next key level will be $75.27 (January 12 high). However, beware of quick profit taking as the end of the year is swift approaching.
On the other hand, $67.12 – the level that held the price in May and June 2023 and into the final quarter of 2024 – still represents the first solid support nearby. If it is broken, the 2024 low will be $64.75, followed by the 2023 low at $64.38.
US WTI Crude Oil: Daily Chart
