On Friday (October 28), international oil prices fell as weak global demand weighed on the market. But supply concerns will help prices end the week higher as Europe is about to cut off Russian oil imports. The two major oil prices have risen by nearly 3% this week, and will see $90.67 in the market outlook.
At 16:06 Beijing time, NYMEX crude oil futures fell 1.25% to $87.97 per barrel; ICE Brent crude oil futures fell 0.94% to $94.15 per barrel.
Despite the risk of a recession in global crude demand for the rest of the year, a strong rebound in U.S. gross domestic product in the third quarter, released overnight, underscored the resilience of the world‘s largest economy and oil consumer.
“From an oil market perspective – despite high interest rates – that directly drives your demand outlook,” said Baden Moore, head of commodities research at NAB. With sanctions on Russian crude coming into effect in December, market volatility is likely to rise.
Brent’s widening premium to NYMEX has been fueled by signs of increased European buying ahead of the Russian oil embargo and imminent supply cuts by the Organization of the Petroleum Exporting Countries and its partners (OPEC+).
Analysts at TD Securities believe that energy prices are being bought by algorithmic trend followers, “Futures advisors are building a net long position in Brent, but oil prices are extremely volatile amid weak trend signals and deleveraging of risk parity portfolios. May limit the level of participation of this group.”
On the hourly chart, NYMEX crude oil is expected to touch $90.67, which is the 123.6% target level of the upward iii wave that started at $82.65. Wave iii is a subwave of the up (i) wave that started at $81.34.