The commodity market has been facing challenges in maintaining its upward momentum, especially with recent sell-offs happening frequently. One of the major factors affecting the market is the fluctuation in interest rates and the value of the US dollar. The price of Brent crude oil, for example, fell to 83.60 USD per barrel on Thursday due to expectations regarding lending costs. The possibility of high Federal Reserve interest rates for an extended period has raised concerns about the demand prospects for energy resources, making commodities less attractive to investors who pay in US dollars.
Market participants have been speculating on the consequences if the Federal Reserve decides to postpone the beginning of the easing cycle or not lower rates at all this year. This uncertainty has put significant pressure on the entire spectrum of commodity assets, including oil. Additionally, fresh statistics from the API showed that crude oil inventories in the US fell by 6.490 million barrels for the week, while gasoline stocks decreased by 0.452 million barrels and distillate reserves rose by 2.045 million.
On the technical side, Brent crude oil has been showing some interesting trends. On the H4 chart, a corrective wave is developing towards 82.55, with expectations of a consolidation range above this level before initiating a new growth wave towards 84.70. Breaking through this level could extend the trend to 86.50. The MACD indicator confirms this scenario with its signal line pointing upwards. On the H1 chart, a growth impulse structure to 84.66 has been completed, with a correction to 83.60 currently happening. A consolidation range below this level could signal a growth wave towards 85.00. The Stochastic oscillator also supports this scenario with its signal line above the 20 mark.
With June approaching, concerns are growing regarding the upcoming OPEC meeting this Sunday. The decisions made during this meeting could have a significant impact on the commodity market, especially on the price of oil. It is essential for market participants to closely monitor the outcomes of this meeting and adjust their strategies accordingly to navigate the challenges in the commodity market.
The recent trends in the commodity market, particularly in the price of Brent crude oil, indicate that there are various challenges impacting the market’s upward momentum. Factors such as interest rates, the value of the US dollar, and market speculation play a significant role in determining the direction of commodity assets. It is crucial for investors and market participants to stay informed about these factors and adapt their strategies accordingly to navigate the uncertainties in the commodity market.