Crude Oil recovers on tariffs and ceasefire talks

• Israel has agreed in principle to the ceasefire proposal from the US. 
• President-elect Donald Trump has announced 25% tariffs on imports from Canada. 
• The US Dollar Index edges slightly lower on the back of the tariffs news. 

Crude Oil tries recover by jumping nearly 1% on Tuesday ahead of weekly Crude Oil stockpile change numbers from the American Petroleum Institute (API). The move comes after the President-elect has confirmed to be hitting Mexico and Canada with 25% tariffs on imported goods. Meanwhile, in the Middle East, Israel’s Prime Minister Benjamin Netanyahu is said to agree to the ceasefire proposal from the US, which is now up to Hezbollah to sign before taking effect. 

The US Dollar Index (DXY), which measures the Greenback’s performance against a basket of currencies, is struggling only because the Canadian dollar (CAD) is part of the DXY basket. A weaker CAD is being offset with a stronger Euro (EUR) and Swedish Krona (SEK) against the US Dollar. Later this Tuesday, traders will focus on the release of the Federal Reserve (Fed) Minutes for the November meeting for fresh clues on the possibility of a December interest rate cut. 

At the time of writing, Crude Oil (WTI) trades at $69.40 and Brent Crude at $73.04

Oil news and market movers: OPEC+ talks ramp up

• There is a strong case for the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to extend its production normalization timing to as late as the second quarter of 2025 to get a clearer picture of the market, RBC head of commodity strategy Helima Croft says in a note, reported by Bloomberg. 
• Russia sees its seaborne crude exports undergo its biggest drop since July, with shipments sliding to a two-month low. Flows towards key buyer India fell sharply in relationship with that, Reuters reports.
• Oil traders are pointing out that a risk premium over the situation in the Middle East still has some room to get priced out now that a ceasefire deal is just around the corner between Israel and Hezbollah, Bloomberg reports. 
• Officials from Iraq, Russia and Saudi Arabia (three of the biggest nations in OPEC+) are meeting in Baghdad to discuss energy markets just a few days before OPEC+ holds its year-end gathering on Sunday, Bloomberg reports. 

Oil Technical Analysis: Forget about it

Crude Oil price might enjoy a surge in volatility to enjoy some recovery. However, in the end, it looks like another delay in production normalization will be rescheduled yet again by the OPEC+ in its upcoming meeting. With the Trump administration set to drill and pump up more US Oil, the question could arise of whether there will ever be a production normalization from OPEC+ in 2025.

On the upside, the 100-day Simple Moving Average (SMA) at $72.53 and the pivotal level at $71.46 just below are the two main resistances. The 200-day SMA at $76.36 is still far off, although it could be tested if tensions intensify further. In its rally towards that 200-day SMA, the pivotal level at $75.27 could still slow down any upticks. 

On the other side, traders need to look towards $67.12 – a level that held the price in May and June 2023 – to find the first support. In case that breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.

US WTI Crude Oil: Daily Chart