After the weekend, crude oil prices moved away from their lowest in twelve months. The cold snap that boosts energy demand is taking precedence over concerns about global growth.
Supply and Demand
WTI crude oil is trading near the $75 mark on the NYMEX after testing its $70 support level yesterday. Keystone, one of the main pipelines operated by TC Energy (NYSE:TRP) that can carry about 0.6 million barrels from Alberta (Canada) to the US, has been undergoing maintenance since Wednesday after a critical leak was detected in Kansas.
Source: Bloomberg
On the other hand, the easing of COVID restrictions in China and Hong Kong gives hope for a rebound in the economy. According to Goldman Sachs in a report published on Sunday (Dec 11), the reopening in China could push crude oil prices up by $15. A jump in both domestic and international flights in China is to be noticed. Similarly, the removal of a three-day monitoring period for arrivals in Hong Kong marks a shift in health restrictive policies.
Weather
Another element capable of restoring momentum to the market is the degraded weather conditions in the northern hemisphere – also likely to fuel demand.
Firstly, in Europe, a mass of cold air from the Arctic brought temperatures down several degrees below seasonal averages. Secondly, in the United States, a cold front will sweep through much of the East, with negative temperatures forecast in Chicago, Cleveland, and Indianapolis.
Technical Charts
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