- Crude oil rebounds, poised for a 5% weekly gain after a turbulent Friday session.
- US PMI data highlights a resurgence in US economic strength.
- The US Dollar Index hits a new two-year high, maintaining its gains as the week approaches its close.
Crude oil prices are set to end the week above $70, driven by heightened tensions between Russia and Ukraine. Both nations are vying for a strategic advantage ahead of potential resolution talks once President-elect Donald Trump assumes office in January 2025. A notable development in the conflict is Russia reportedly targeting a Polish military base, a NATO member, for possible retaliation if Ukraine launches further attacks, according to Yahoo News.
Meanwhile, the US Dollar Index (DXY) remains strong following disappointing European preliminary Purchasing Managers Index (PMI) data for November, which fell significantly short of expectations. The figures indicate a contraction in business activity across the Eurozone's manufacturing and services sectors, further boosting the US Dollar as investors favor US economic stability. Strong US PMI results, surpassing estimates, continue to support inflows into the Dollar.
As of now, WTI crude trades at $70.69, while Brent crude is at $74.22.
Oil News and Market Movers: OPEC Meeting Likely a Non-Event
- Russia-Ukraine Escalation: Yahoo News reports that Russia has added a Polish military base to its list of targets in response to potential future missile strikes from Ukraine.
- Security Meeting in Russia: Bloomberg notes that Russian President Vladimir Putin is scheduled to hold a security meeting later on Friday, though the agenda remains undisclosed.
- OPEC+ Meeting Update: According to Reuters, OPEC+ delegates expect next month's meeting on oil production plans to be held online rather than at its Vienna headquarters. The meeting is set for December 1.
- Production Outlook: Oil-watchers anticipate OPEC+ will further delay plans to ramp up production, with the second quarter of 2025 now seen as the likely target, Bloomberg reports.
- Baker Hughes US Oil Rig Count: The weekly count is due at 18:00 GMT, with the previous figure at 478 operational rigs.
Oil Technical Analysis: Crude Set to End the Week Strong
Crude oil prices are on track to close the week with a solid 5% gain, fueled by geopolitical tensions. However, traders are questioning if further upside is likely, as many analysts suggest these recent moves may be positioning tactics ahead of potential negotiations between Russia and Ukraine.
The 55-day Simple Moving Average (SMA) at $70.13 was tested earlier on Friday. A daily close above this level could pave the way for further gains, with the 100-day SMA at $72.77 as the next target. The 200-day SMA at $76.45 remains distant but could come into play if tensions escalate.
Support lies at $67.12, a level that held firm in May and June 2023. Below that, the year-to-date low at $64.75 and the 2023 low at $64.38 provide additional support.
Crude oil is set to close this week in the green, but its next moves will likely depend on the evolving geopolitical landscape and market reactions to OPEC+ decisions.
