Pre Open US - US Oil 24 July 2023

Oil prices have experienced a fourth consecutive weekly increase due to indications of tightness in global markets. Notably, Russian supply has been declining, with crude oil shipments from the country dropping to a six-month low in the four weeks leading up to July 16. This has positively affected market sentiment. Additionally, the risks of supply disruptions have risen following Ukraine's warning that any ships heading to Russian ports may be considered military targets.

Investors have factored in quarter-point interest rate hikes from both the Federal Reserve and the European Central Bank for this week. As a result, all eyes are on Fed Chair Jerome Powell and ECB President Christine Lagarde to gain insights into potential future rate increases.

The rise in interest rates has had a dampening effect on investments and has also strengthened the value of the US dollar. Consequently, dollar-denominated commodities have become more expensive for holders of other currencies.

In China, the state planner recently introduced measures aimed at stimulating private investment in certain infrastructure sectors. Additionally, there are plans to reinforce financing support for private projects. Market participants anticipate that Beijing will implement targeted stimulus measures to support its slowing economy, which is likely to boost oil demand in the world's second-largest consumer.

WTI crude oil has broken the $77 resistance level, opening the door for WTI to sustain its momentum toward the next target of $79. Furthermore, every week, the 200MA is acting as a barrier at the $77 mark. The Black Sea is home to a major Russian oil terminal.