Oil Prices Show Sideways Trading

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Oil Prices Show Sideways Trading

Oil Prices Show Sideways Trading Ahead Of Breyl

Oil markets remain stuck in sideways trading as the traders are waiting for the storm Breyl to make an impact in the Gulf of Mexico. Considering a lot of oil production facilities are in that area, any major damage could cause supply disruptions.

Additionally, there's also a factor that supports higher oil prices... The summer season is here which means more electricity demand and subsequently strong demand of oil.

Oil Prices Sit At 2-Month High

So, while the market has moved sideways, the crude oil prices are still sitting at 4-week gains on hopes that higher summer demand will fuel more crude oil consumption. At the same time, the supply disruptions from the storm Breyl could also push the oil prices higher.

However, there are also many factors that are bearish for the oil market. The first one is soft demand from China, along with consistently slow economic growth despite numerous stimulus measures. That's one of the major factors which keeps the oil gains limited as China is among the top oil importers.

The Brent Oil futures for September are trading at $86.67, while the WTI futures are trading near $82.28. It is safe to say that both of these future contracts are showing a long-term bullish trend with eyes set on $84, $85, and then the $90 handle.

Back to the talks of the storm, one of the key oil-producing regions is the Gulf of Mexico. This region is expected to be impacted by the storm, leading to potential production disruptions.

Meanwhile, the travel demand in the USA is sitting at historic highs during the holidays. Additionally, the US inventories have recorded a major drawdown, which means the US government will buy oil to fill up the reserves.

For now, the long-term trend of the Oil market is still bullish while the short-term shows sideways trading ahead of the storm Breyl.

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