Decode foreign exchange platform analysis: geopolitical situation superimposed inventory data decline, oil price bulls return?

On Monday (December 30), U.S. crude oil rose slightly in the Asian session, trading around $70.68/barrel. Fundamentally, data released by the U.S. Energy Information Administration (EIA) on Friday showed that,

U.S. crude inventories fell by 4.20 million barrels in the week ending Dec. 20 as refinery refining activity increased and the holiday season also boosted fuel demand.

Decode Forex PlatformAnalysts polled by Reuters had expected a reduction of 1.90 million barrels. U.S. crude inventories fell by 3.20 million barrels last week, market sources said on Tuesday, citing data from the American Petroleum Institute.

Fuel distributor TACenergy said Friday that the war between Russia and Ukraine appears to be back in the spotlight after a number of events this week that could affect supplies next year.

The war has become a secondary factor in the energy market due to stagnant global oil demand. "

Meanwhile, wholesale gas prices in the Netherlands and the UK have risen, leaving little hope of reaching a new deal to transfer Russian gas through Ukraine.

The probability of the Federal Reserve cutting interest rates in January 2025 is 10.7%, compared to 12.8% last Friday.

According to the CME "Fed Watch", the probability that the Fed will keep interest rates unchanged in January 2025 is 89.3%, and the probability of a 25 basis point rate cut is 10.7%.

The probability of maintaining current interest rates unchanged through March 2025 is 51.8%, the probability of a cumulative 25 basis point cut is 43.7%, and the probability of a cumulative 50 basis point cut is 4.5%.

Due to the slowdown in the Federal Reserve's interest rate cut expectations, oil price bulls have been pressured to a certain extent, but the dollar index has not yet broken through the previous high. We continue to observe whether the market's interest rate cut expectations for the Federal Reserve are pressuring demand to pick up.

Traders focus on the outlook for 2025, expecting a crude oil supply glut next year

Institutional analysis pointed out that oil prices remained stable as traders focused on oil market risks in 2025, including supply conditions and the unpredictability of the incoming U.S. administration.

WTI crude stayed above $70 a barrel in light trading after rising 1.6% last week, with Brent crude trading near $74.

The market is widely expected to be oversupplied next year, which could make it harder for OPEC and its allies to resume idle production.

The price of crude oil is headed for a decline this year, and crude oil has been trading in a narrow range since mid-October.

Markets have been buffeted by bullish and bearish signals, including continued hostilities in the Middle East and concerns about demand from the world's largest oil importer.

From a technical standpoint, the US crude oil daily line is still consolidating around the 55-day moving average, and the current price has not been able to break through the box pressure. In the short term, the MACD indicator has opened up again, and there is a possibility of continued rebound.

During the day, we will focus on whether the box pressure near $72 breaks through, thus supporting the bulls to accelerate upward.