Oil and gas talking points:

  • Crude Oil Price finds support as supply constraints limit losses
  • Rising energy prices weigh on EU policymakers as consumers fear higher prices, carbon dioxide (CO2) shortages and a cold winter
  • Inflation, FOMC Economic projections and BoE rate decision remains at the forefront of the feeling of risk

A range of fundamental factors continue to weigh on the raw materials sector, affecting oil prices and gas which increased sharply throughout the year.

Although both Federal Reserve and the European Central Bank (ECB) continued to maintain an accommodative position throughout the global Covid-19 pandemic, the rise in commodity prices raised fears that inflation was not “transient”, placing the interest rate decision of this week of the world’s two largest economies in the foreground of risk sentiment.

DailyFX Economic calendar

However, supply bottlenecks were further exacerbated by production disruptions from WTI, as oil producers off the Gulf of Mexico struggled to recover from the damage caused by Hurricane Ida.

Read about How crude oil prices are responding to fears of weather-induced disruption

Meanwhile, the pandemic and the increase in natural disasters have pushed European policymakers to focus on tackling climate change, forcing producers and non-renewable energy providers to pay higher costs which have seen the gas prices increase by about 280% this year.

Oil Price Prediction: WTI Crude Oil Price Test Support - Key Levels To Watch Out For

Source: Réfinitiv

U.S. Crude Oil (WTI) Price – Key Levels to Watch

After rebounding from the August trough ($ 61.70), oil supply shortages supported the strong rebound of crude oil price, allowing bulls to temporarily drive up prices.

However, after facing a wall of resistance just below the key psychological level of $ 73.00, bears were able to push prices back towards 23.6% Fibonacci level of the move from August to September, currently holding support at $ 70.39.

With prices Currently trading above the 50-period Moving Average (MA), the commodity channel index (CCI) Currently trading below 100, at least for now.

How to trade oil: strategies and tips for trading crude oil

While price action currently remains encapsulated between the key Fibonacci levels of the above-mentioned move, persistent supply constraints and economic issues remain the primary catalysts for the impending move.

US Crude Oil (WTI) Daily Graphic

Daily Oil Table

Graphic prepared by Tammy da costa using TradingView

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @ Tams707

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