Oil was one of the underperforming assets on Monday, dropping massively, despite soaring equities and bullish sentiment elsewhere.
Oil fell sharply on Monday after reports that Libya took a major step toward reopening its biggest oil field. The West Texas Intermediate (WTI) benchmark dived 3%, and it declined below the 40 USD threshold, again. The European benchmark – Brent – was trading at around 42 USD at the time of writing.
Additionally, it looks like Norway’s oil worker’s strike has been cancelled, which also erased some uncertainty. So far, the strike has resulted in the shut-in of 8% of Norway’s oil and gas production, or 330,000 barrels of oil per day. If the shut-in stop, supply will grow back to normal it would be considered another bearish factor.
Moreover, Iraq expects the pressure on oil prices to continue through at least the first quarter of 2025, with oil minister Ihsan Abdul Jabbar expecting the average for Brent between January and March 2025 to be at 45 USD a barrel, Bloomberg reported earlier Monday.
That is 5 USD lower than what Saudi Arabia expects as the Kingdom anticipates oil will be trading near 50 USD in early 2025.
As oil is more connected to the economic reality than stocks, more lockdowns, business closures, less traveling, and everything else related to the COVID pandemic should harm oil prices.
The key support remains near 36 USD for the WTI benchmark. and if this level is broken to the downside, oil could revisit the 30 USD level again.
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Peter Bukov | Market Analyst
Peter comes from a background in corporate finance which began in 2013 when he completed the Corporate Finance Program at the University of Economics in Bratislava. He’s been actively involved in the market sector since 2008 and got his hands-on experience in trading in 2011.
His experience in finance and trading continues not only as a market analyst at Axiory Intelligence but also through his studies to obtain a degree in Capital Markets. The study is in line with MIFID II regulations and is under the supervision of the European Regulator ESMA, which strongly emphasizes ethics and morale in investing and working with a client.
In addition, Peter was awarded the title of ASCI from the CISI Educational Institute of England where he is an associate member and the Bloomberg Aptitude Test results ranked him among the top 4% worldwide two years in a row.
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