Oil jumps 1% and sees Christmas rally steam onwards with Red Sea tensions making headlines

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<li><strong>WTI Oil snaps above $74 and enters room for more upside. </strong></li>
<li><strong>Oil surges as demand is set to pick up after all big freight shipping companies are taking longer routes to avoid the Red Sea passage. </strong></li>
<li><strong>The DXY US Dollar Index jumps higher after a downbeat start of the week.</strong></li>
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<p>Oil prices are jumping higher throughout the week as Red Sea attacks fuel fears of disrupted supply chains. On Monday, a vessel was attacked by missiles coming from Houthi rebels, making the passage in the Red Sea to the Suez Canal unsafe as a travel route. All big freight shipping companies have deviated their fleet away from the Red Sea, taking the much longer road around Africa, making it more expensive and diesel consuming to get goods where they need to be. </p>
<p>Meanwhile, the US Dollar (USD) is unable to benefit from the safe-haven inflow, with markets rather focusing on the quick solutions delivered. Instead, the Greenback is stuck with markets being clueless about what to do with all comments from Fed speakers that are pushing back against early rate cuts expectations from markets. From a technical point of view, trading volumes are starting to die down ahead of Christmas. </p>
<p><a href="https://www.fxstreet.com/markets/commodities/energy/oil">Crude Oil</a> (WTI) trades at $75.01 per barrel, and Brent Oil trades at $80.22 per barrel at the time of writing. </p>
<h2><strong>Oil News and Market Movers: Inflation to pick up  </strong></h2>
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<li>The US is forming a task force with France, Canada and several other countries to monitor safe passage in the Red Sea. However, this will take time before becoming a reality. </li>
<li>Markets are already gearing up for a pickup in inflation on the back of the longer routes vessels, and ships will need to take to go around Africa, which comes with longer transportation times and more fuel consumption. </li>
<li>Overnight, the weekly numbers from the American Petroleum Institute (API) were released. A build of 939,000 was reported for the Crude stockpile.</li>
<li>At 15:30 GMT, the Energy Information Administration (EIA) is set to release its crude numbers. Previous was a drawdown of 4.259 million, and another  drawdown of 2.233 million barrels is expected.</li>
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<h2><strong>Oil Technical Analysis: Another 10% to go</strong></h2>
<p>Oil prices are soaring higher as problems mount in one of the most important areas for global trade. The Red Sea and Suez Canal will see substantially less passage as all big shipping firms are sending their fleet around Africa, awaiting the US-led task force to be operational. Meanwhile, demand for Crude will likely jump, with market participants afraid to fall without supply as longer routes now need to be factored in for delivery.</p>
<p>On the upside, $74 got broken and tested for support, offering more upside. Once through there, $80 comes into the picture. Although still far off, $84 is next on the topside once Oil sees a few daily closes above the $80 level. </p>
<p>Below $74, the $67.00 level could still come into play as the next support level to trade at as it aligns with a triple bottom from June.. Should that triple bottom break, a new low for 2023 could be close at $64.35 – the low of May and March – as the last line of defence. Although still quite far off, $57.45 is worth mentioning as the next level to keep an eye on if prices fall sharply. </p>
<p><a href="https://editorial.fxstreet.com/miscelaneous/WTI%20US%20OIL%20(64)-638386661727300126.png" target="_blank" rel="noopener"><img decoding="async" alt="US WTI Crude Oil: Daily Chart" src="https://editorial.fxstreet.com/miscelaneous/WTI%20US%20OIL%20(64)-638386661727300126.png" style="width: 637px; height: 320px;" /></a></p>
<p><small>US WTI Crude Oil: Daily Chart</small></p>
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<h2>WTI Oil FAQs</h2>
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<p>WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.</p>
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<p>Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.</p>
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<p>The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.</p>
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<p>OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.</p>
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<br /><a href="https://www.fxstreet.com/news/oil-pulls-off-christmas-rally-as-red-sea-chaos-feeds-demand-202312201145">Source link </a></p><p>The post <a href="https://forextraderhub.com/oil-jumps-1-and-sees-christmas-rally-steam-onwards-with-red-sea-tensions-making-headlines.html">Oil jumps 1% and sees Christmas rally steam onwards with Red Sea tensions making headlines</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>