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The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Crude Oil Still Heavy as US Dollar Needs Buyers

USOIL is still heavy this week as a stronger US dollar and demand fears weigh. 

The dollar was boosted by more substantial ADP employment numbers, which will bode well for Friday's Non-Farm payrolls. 

USOIL - Weekly Chart

USOIL - Weekly Chart

Oil slipped below the $75 level with a price of $74.87 and still lacks buying support. 

The price of crude oil has remained volatile due to uncertainty over the plans in Russia. However, some analysts do expect crude oil prices to rebound in 2023. A bounce in crude prices began in February after the conflict in Ukraine but has since slumped on China's lockdowns. China has started to reopen its economy, which could boost prices, but OPEC is another uncertainty with production cuts.

USOIL is expected to "bounce between $75 and $80 per barrel" during the first quarter. This is primarily attributed to global supplies under pressure from OPEC cutbacks and a western embargo on Russian oil, said Bernard Weinstein of the Maguire Energy Institute. 

The energy sector is expected to produce "more gains as many commodities remain structurally undersupplied and with the bull super cycle still young," he wrote in a research report this week. 

Price advances may be "back-end loaded in 2023 as we anticipate a recession in the first half" of the year, LaForge said. "Within commodity sectors we like energy the best and suspect that oil prices are on track for another positive year, driven by production challenges and strategic opportunities in large oil-producing countries," he added. 

A survey of US oil and gas executives taken by the Dallas Federal Reserve expected crude prices to rise to $84 a barrel. The weight on oil has paused amidst the US dollar sell-off with threats of a global recession in mid-year.

The market has remained bearish on oil prices, but there still seems to be no end in sight for the conflict in Ukraine, and we cannot rule out another escalation. Therefore, investors should look upwards from this price pullback after the recent sell-off over the last six months.

Last Updated: 06/01/2023

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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