On Friday (December 9), international oil prices rebounded slightly due to the suspension of supply from Canada’s main oil pipeline to the United States. However, the market still lacks confidence in the bottoming of crude oil prices. The expectation of economic recession in Europe and the United States has increased, and oil prices are still bearish. NYMEX crude oil fell below $70.
At 15:53 Beijing time, NYMEX crude oil futures rose 0.29% to $71.67 a barrel; ICE Brent crude futures rose 0.24% to $76.35 a barrel. Both cities hit new lows since late December 2021 overnight, reaching US$71.12/barrel and US$75.74/barrel respectively.
Canada’s TC Energy’s Keystone pipeline shut down due to an accident in the United States, and more than 14,000 barrels of crude oil leaked into a creek in Kansas, becoming one of the largest crude oil spills in the United States in the past decade.
RBC Capital analyst Robert Kwan said that previous outages caused by oil spills were usually resolved in about two weeks, although the latest outage may last longer because it involves water pollution.
Although the sudden incident caused a brief rise in oil prices overnight, the market still lacked confidence in the bottoming of crude oil prices, and it still closed down in the end. “It’s likely to be exacerbated by lower trading activity (for the year-end holidays),” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
The latest survey shows that the U.S. economy will fall into a short and mild recession in the coming year, and most economists expect that the Federal Reserve will lower the interest rate hike to 50 basis points at the December policy meeting. The European Central Bank is also likely to raise interest rates by 50 basis points next week, while the euro zone economy is almost certain to slip into recession.
On the daily chart, NYMEX crude oil started a downward III wave trend from $83.34, and the lower support looked at the 61.8% target of $70.89 and the 76.4% target of $67.95. Wave iii is a sub-wave of the downward (iii) wave that started at $93.74. The 61.8% target of wave (iii) is at $64.43, which is a sub-wave of the downward ((c)) wave that started at $123.68.