Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Is Crude Oil About To Pivot Into Bearish Territory?

By Sunshine Profits (Sébastien Bischeri)CommoditiesJun 24, 2022 11:14AM ET
www.investing.com/analysis/is-crude-oil-about-to-pivot-into-bearish-territory-200626260
Is Crude Oil About To Pivot Into Bearish Territory?
By Sunshine Profits (Sébastien Bischeri)   |  Jun 24, 2022 11:14AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

What outcome or outlook for crude oil should we expect when looking at the current macroeconomic environment?

Recession Fears

Oil prices were up during the US session on Friday as fears of insufficient crude oil supply to meet demand during the summer took precedence over those of a recession amid runaway inflation.

Markets fear that economic activity slow will lead to lower global demand. In addition, growth in economic activity in the Eurozone slowed sharply in June – notably in the private sector – to its lowest level in 16 months due to inflation, according to the composite PMI index published on Thursday by S&P Global.

Comments by Federal Reserve Chairman Jerome Powell have also fueled fears of a global slowdown since the Fed's chairman has not ruled out the risk of recession in the United States.

Indeed, the head of the US Federal Reserve, heard Thursday by the Finance Committee of the House of Representatives, repeated that his priority remained the fight against inflation:

"We're going to want to see evidence that it really is coming down before we declare 'mission accomplished."

Finally, while addressing an audience's question about whether the war was responsible for inflation, Powell answered:

"No, inflation was high before – certainly before the war in Ukraine broke out."

Here is an interesting article published on FXStreet that summarizes some of Powell's remarks in Congressional testimony.

In addition, according to several media, Joe Biden's proposal to temporarily lift the federal tax on gasoline and diesel did not have sufficient support to be adopted in Congress (a mandatory step).

Fundamental Analysis

In a rare occurrence, plagued by technical issues, the US Energy (NASDAQ:USEG) Information Agency (EIA) has announced that it will not release weekly US oil inventory and oil inventory figures this week. So, let's look at the statistics from the American Petroleum Institute.

US API Weekly Crude Oil Stock

The weekly commercial crude oil reserves in the United States increased by over 5.607M barrels. At the same time, the forecasted figure was expected to be in negative territory (-1.433M), according to figures released on Wednesday by the US American Petroleum Institute (API).

Weekly Commercial US Crude Oil Reserves
Weekly Commercial US Crude Oil Reserves

US crude inventories have increased by over 5.607 million barrels, which firmly confirms slowing demand and could be considered a strong bearish factor for crude oil prices. This figure would indeed signal a drop in Americans' appetite—at least at the current fuel prices—for petroleum products.

US Crude Oil Inventories
US Crude Oil Inventories

Source: Investing.com

Brent Crude Oil Futures (August Contract) Daily Chart
Brent Crude Oil Futures (August Contract) Daily Chart

To conclude, is it even worth pointing out that in the event of a recession, the demand for petroleum products would fall, the current astronomical refinery margins would collapse, and therefore, a key bullish factor for crude oil would certainly vanish?

* * * * *

The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Is Crude Oil About To Pivot Into Bearish Territory?
 

Related Articles

Fawad Razaqzada
Silver Lining For Precious Metal By Fawad Razaqzada - Aug 10, 2022 3

All eyes on U.S. CPI  Precious metals have made post-nonfarm payroll highs Silver’s hammer monthly candle off key long-term support suggests low might be in Precious metals have...

Is Crude Oil About To Pivot Into Bearish Territory?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Jeff Page
Jeff Page Jun 26, 2022 5:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm out of all commodities.
Leo Mu
Leo Mu Jun 24, 2022 7:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Oil uptrend resumed, JPM and GS were right, crude may reach $150 in Q3. To reduce carbon emissions, U.S. refinery capacity decreased for second consecutive year, how about next year?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email