Harvest Global Markets :

Oil prices have remained relatively stable, showing minor gains on Friday, but are poised for a second consecutive week of losses. These developments are primarily driven by concerns over potential supply disruptions in the Middle East, a crucial oil-producing region, and uncertainties surrounding the demand outlook, particularly in China, the world’s largest importer of crude oil.

Brent crude futures saw a modest increase of 0.3%, reaching $87.14 per barrel, while U.S. West Texas Intermediate (WTI) crude futures also experienced gains of 0.4%, settling at $82.82 per barrel.

Despite experiencing significant price spikes on Thursday, Brent crude is on track to end the week with approximately a 4% decline, and WTI is expected to close the week with a 3% decrease compared to the previous week.

These oil price movements are influenced by several factors. Market sentiment is shaped by the anticipation of the U.S. Federal Reserve’s conclusion of its interest rate hiking cycle. However, concerns linger regarding the demand for oil, particularly in light of recent economic developments in China.

In October, China’s manufacturing activity unexpectedly contracted, with the official purchasing managers’ index (PMI) dropping below the critical 50-point threshold, indicating a decline in demand. A private sector survey also revealed slower growth in China’s services sector, with weak sales and stagnant employment, reflecting a decline in business confidence.

Looking ahead, the oil market is expected to maintain a cautious stance, leaning toward a bearish sentiment due to reduced supply concerns in the Middle East and ongoing uncertainties in China’s demand dynamics. Brent crude may post weekly losses of around 4%, while WTI is likely to see a 3% decline compared to the previous week.

From a technical analysis perspective, the oil price is currently trading just above minor support at $82.68, suggesting a potential shift in sentiment. It remains within a neutral zone between the 200-day and 50-day moving averages, but the proximity to the shorter-term 50-day moving average at $86.32 hints at a cautious optimism among traders.

In conclusion, oil prices have faced stability and minor gains, but concerns over supply disruptions in the Middle East and uncertainties in China’s demand outlook have led to a second consecutive week of potential losses. The oil market is expected to remain cautious, and traders should be vigilant for possible fluctuations in the coming days.