Weekly Oil Report: Bullish and Bearish Aspects of the Market

After the third week of oil fall, the market began the week with a slight bullish gap. Brent and WTI closed the week at $81.73 and $81.34 on Friday. Technically speaking, the chart is still on an uptrend and there is strong resistance at $79. There are both bullish and bearish factors on the market. The delta variant new outbreaks in several regions, demand perspective, and supply chain disruptions are several bearish factors of the market. On the other hand, the economic recovery of many economies is bullish. We shall see how it will react to them in December-January. OPEC rejected all the requests for increasing the supply. The committee states that the demand side risks are still high and it would not jeopardize the price by oversupplying. Kuwait oil minister also believes that there would be an oil surplus in 2022 in all the scenarios. Federal Open Market Committee (FOMC) announced its intentions to keep the interest rate unchanged. In addition, the Federal Reserve stated its plans for purchasing $15 billion assets per month which starts from November. The members are still uncertain about the covid situation and supply chain disruptions. The unemployment rate and non-farm payrolls reports were above expectations. The market should be alerted about the average hourly earnings as well. The Federal Reserve will take all the reports into consideration for future decisions. When all these reports improve, the Fed shall probably begin the tapering. Petrochemicals went through a chaotic condition since oil and freights have frightened traders about their future plans. Some are making hasty decisions to keep up with the rising prices of the market, others are hesitant about the stability of the situation. Despite traders’ decisions, the prices are rocketing higher per week. Some countries are experiencing the highest prices of their recent years.