Oil falls below $80 despite confirmed supply cuts from Saudi Arabia, Russia
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<li><strong> WTI Oil falls to a three-month low.</strong></li>
<li><strong>The US Dollar holds ground above 105.00 despite abrupt correction. </strong></li>
<li><strong>Oil faces risk of falling to $78, last line of defence before $70 comes into play.</strong></li>
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<p>Oil prices are falling like a rock despite the reaffirmation from Saudi Arabia and Russia that supply cuts will remain for at least until December. Traders are labelling the standing commitment as old <a href="https://www.fxstreet.com/news">news</a>, sending Crude prices further down as China export numbers are showing a substantial slowdown and less demand from the biggest Asian Crude consumer in the region. Oil prices have made a new three-month low and might head further down in current conditions. </p>
<p>Meanwhile, The US Dollar (USD) fell hard last week, and saw its summer rally coming to an end. Several US <a href="https://www.fxstreet.com/economic-calendar/united-states">economic indicators</a> are starting to flash red, meaning that the economy is starting to cope badly with the elevated rate environment. Meanwhile, US spending is going through the roof as US President Joe Biden is pledging millions not only to Ukraine, but to Israel as well, increasing the debt burden for the US Treasury. </p>
<p><a href="https://www.fxstreet.com/markets/commodities/energy/oil">Crude Oil</a> (WTI) trades at $79.13 per barrel, and Brent Oil trades at $83.43 per barrel at the time of writing. </p>
<h2><strong>Oil news and market movers</strong></h2>
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<li>The Ozark pipeline in the US has reported an outage. The pipeline transports mainly US crude from Cushing, Oklahoma, to a Phillips 66 refinery in Illinois. This is good news for the Cushing supply build after being at several substantial low level.</li>
<li>China economic numbers have shown that exports shrank by a substantial 6.4% , which means that the biggest demand player in the Oil market will show less appetite for buying crude Oil. </li>
<li>Saudi Arabia and Russia have reconfirmed their commitment to cut Oil output by more than 1 million barrels per day combined. This move suggests that both countries are trying to protect an elevated floor in prices amid bleak demand. </li>
<li>The weekly American Petroleum Institute Crude Stockpile numbers are due to come out at 21:30 GMT. Previous number was a build of 1.374 million. </li>
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<h2><strong>Oil Technical Analysis: Sinking lower</strong></h2>
<p>Oil prices are retreating further from their peaks. Although some Oil producing countries are trying to put a price cap, the current fade in demand is too big to bear. More selling pressure could be on the horizon as US crude stockpile numbers could reveal a build. Either more supply cuts or a substantial spillover of violence in the Middle East could see Oil prices spiking again. </p>
<p>On the upside, $84.25 is the new resistance. Should Crude be able to print a similar performance as the US <a href="https://www.fxstreet.com/currencies/us-dollar-index">Dollar Index</a> did on Tuesday, expect even a quicker sprint to $88. Should Oil prices be able to consolidate above there, the topside for this fall near $93 could come back into play.</p>
<p>On the downside, traders are bracing for the entry of that region near $78. The area should see ample support for buying. Any further drops below this level might see a firm nosedive move, which would likely cause Oil prices to sink below $70.</p>
<p><a href="https://editorial.fxstreet.com/miscelaneous/WTI%20US%20OIL%20(42)-638349525097094222.png" target="_blank" rel="noopener"><img decoding="async" alt="US Crude (Daily Chart)" src="https://editorial.fxstreet.com/miscelaneous/WTI%20US%20OIL%20(42)-638349525097094222.png" style="width: 605px; height: 495px;" /></a></p>
<p><small>US Crude (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-sinks-below-80-even-as-saudi-arabia-russia-reaffirm-supply-cuts-202311071116">Source link </a></p><p>The post <a href="https://forextraderhub.com/oil-falls-below-80-despite-confirmed-supply-cuts-from-saudi-arabia-russia.html">Oil falls below $80 despite confirmed supply cuts from Saudi Arabia, Russia</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>
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