On Monday (November 11), US crude oil continued its decline from last Friday during the Asian trading session, trading near $70.03 per barrel. The market's optimistic sentiment towards short-term oil price increases gradually faded as the supply pressure from hurricane impacts eased, global demand expectations remained weak, and the strong US dollar index exerted pressure on oil prices. Oil prices are once again staying within a range-bound oscillation. If they continue to approach and fall below the $70 threshold, they may once again reach recent lows.
On the supply side, oil production in the Gulf of Mexico was partially shut down due to hurricane impacts. However, the latest storm intensity forecasts have weakened, reducing the risks of oil and gas production disruption in the Gulf of Mexico, which has weakened support for oil prices. Analysts point out that the supply impact of hurricanes is decreasing, and the oil market is refocusing on the uncertainties of global economic and demand recovery.
Meanwhile, the recent statements from the Federal Reserve indicate that the US economy remains resilient, which may slow the pace of interest rate cuts. The robust growth of the future economy and productivity could further dampen the need for rate cuts. Although the market's expectations for rate hikes have eased, the strong dollar continues to pressure oil prices, especially as demand has not significantly rebounded.
In terms of geopolitics, the situation in the Middle East has heated up again. The Israeli military recently conducted several airstrikes on the Gaza region, resulting in dozens of casualties, and Palestinian armed groups retaliated against the Israeli forces, leading to high tensions. The Israeli military's airstrikes on northern Gaza resulted in civilian casualties and hit local refugee camps and medical facilities. This conflict has become one of the persistent violent events over the past seven months, exacerbating market anxiety.
Looking ahead, the oil market will continue to focus on inventory data and the performance of the US dollar index to determine the next movement in oil prices. At the same time, developments in the Middle East conflict may also increase uncertainty and volatility risks in the global crude oil market.
