Forex News April 08, 2022

Taking stock of the oil market outlook. WTI crude looks set to close below $100 this week, and the charts show a semblance of a double bottom just below the $94 mark.
This will be an important level to monitor before a possible drop towards $90 in the near future. Even if OPEC+ isn’t going to mess things up, recent sentiment hasn’t been kind to the oil market outlook. Let’s take an inventory of the situation.
China’s lockdowns, as well as geopolitical tensions, continue to threaten a further slowdown in the global economy. Rising inflationary pressures are also weighing on the consumption outlook.
Reserve releases by the US and the IEA have resulted in a narrowing of backwardation spreads, indicating less concern about the near-term availability of oil supply.
There are good reasons to expect a pullback, but the main point remains. That is, the first two factors will pass eventually, while the third is only a temporary fix. Reserve releases do not help to correct the oil market’s structural imbalances.
Oil prices will remain high unless there is a collapse in demand or a crash due to recession fears. If the latter scenario occurs, it would be an ideal time to buy on the dip. Otherwise, any further pullbacks will make it more appealing to scale into longs.
A push towards $90 may entice some buyers, but we will see stronger plays from oil bulls in securing longer-term positions around the levels of $80 to $85.

Edge-Zorin2