Crude Oil Slips On Halt In Houthis’ Red Sea Attacks

Fundamental Analysis

* Ceasefire Chill: Crude oil prices have dipped amid expectations of a halt in Houthi attacks on shipping in the Red Sea, following a ceasefire agreement in the Gaza conflict between Israel and the militant group Hamas. Maritime security officials stated on Thursday that the Houthi militia is likely to announce an end to its Red Sea ship attacks. “The Houthi developments and the Gaza ceasefire contribute to a calmer region, reducing the security premium on oil prices,” said John Kilduff, partner at Again Capital in New York. In the U.S., the Commerce Department reported on Thursday that retail sales rose in December, signaling strong economic demand. Meanwhile, the Federal Reserve’s cautious stance on interest rate cuts this year could lend support to the U.S. dollar in the short term, potentially putting downward pressure on oil prices, as oil is priced in USD.

Technical Analysis

*Technical Breakout: Crude oil price was traded lower following prior retracement from the resistance level 80.00. MACD which illustrate bearish momentum signal suggest the commodity to likely extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 75.90. Conversely, a potential reversal is also to be expected and the price could head back towards 80.00.

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Potential Risks

Looking ahead to Friday, the U.S. economic calendar offers little of significance, with December’s Housing Starts, Building Permits, and Industrial Production data expected to align closely with prior readings. However, these reports are unlikely to generate significant market volatility on their own.

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Monitoring

Stay updated on US data, global market updates, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.