Under the dual support of supply and demand, are oil bulls returning as kings or just making a feint?

2024-12-10 2639

On Tuesday (December 10th), US crude oil fell slightly during the Asian trading session, trading around $68.22 per barrel. Yesterday, US crude oil rebounded by over 1%, reversing last Friday's decline, and the K-line showed a swallowing pattern.

However, fundamentally, the overthrow of the Assad regime in Syria has intensified regional uncertainty, and the risk sentiment of geopolitical situation has resurfaced, supporting the strengthening of supply side pressure. On the demand side, the expected rebound in Asian demand has led to a significant rebound in oil prices.

It should be noted that currently there is only an emotional release and no reversal, as the US dollar is still at a high level and US crude oil is still running below the moving average, waiting for further clarification of fundamentals. We will continue to pay attention to the Federal Reserve's December interest rate decision and this week's US CPI data.

The Syrian Prime Minister agrees to transfer power to the National Salvation Government, and the United States is wary of the rise of ISIS forces

The Prime Minister of overthrown Syrian President Bashar al Assad stated that he agreed on Monday to transfer power to the Salvation Government led by rebel forces, a day after the rebels occupied the capital Damascus and Bashar fled to Russia.

After 13 years of civil war and over 50 years of brutal rule by the Bashar family, the upcoming transfer of power has filled the Syrian people and millions of overseas refugees with hope for the country's future, but also a deep sense of uncertainty.

Damascus regained vitality on Monday, with street traffic restored and people starting to go out after a nighttime curfew, but most shops remain closed.

Bashar al Assad's Prime Minister Mohammed Jalali told Al Arabiya TV that he has agreed to transfer power to the Salvation Government located in the rebel controlled areas of northwestern Syria.

He stated that the transfer of power may take several days. A source familiar with the matter told Reuters that the main commander of the rebel forces, Ahmed al Sharaa, met overnight with Jalali and Vice President Faisal Mekdad to discuss the establishment of a transitional government. Shara vows to rebuild Syria.

According to Al Jazeera, the transitional government will be led by Mohamed al Bashir. Before the 12 day lightning attack by the rebels swept through Damascus, the government of national salvation was led by Bashir.

The advancement of the militia alliance led by the former Al Qaeda branch Hayat Tahrir al Sham was a turning point in the overall situation.

The prolonged civil war in Syria has resulted in the deaths of hundreds of thousands of people, triggering one of the largest refugee crises in modern times. Cities have been bombed into ruins, rural populations have sharply declined, and the economy has been idle due to global sanctions.

The US State Department stated that the US has been in communication with various organizations in Syria, including through intermediaries. Secretary of State Antony Antony Blinken stressed the volatility of Syria's political situation on Monday and predicted that the Islamic State (IS) would try to re-establish its power in Syria during the transition period.

But he said that the United States is determined not to let this happen, and pointed out that the United States struck about 75 Islamic State targets in central Syria on Sunday.

Jorge Leon, Head of Geopolitical Analysis at Rystad Energy, said, "The events that occurred over the weekend in Syria could have an impact on the crude oil market and increase the geopolitical risk premium for oil prices in the coming weeks and months amid greater instability in the Middle East

The probability of the Federal Reserve cutting interest rates by 25 basis points in December is 85.8%, which is close to the previous day

According to CME's "Federal Reserve Watch", the probability of the Fed keeping current interest rates unchanged until December is 14.2%, and the probability of a cumulative 25 basis point rate cut is 85.8%.

The probability of maintaining the current interest rate unchanged until January next year is 10.5%, the probability of reducing interest rates by 25 basis points cumulatively is 67.5%, and the probability of reducing interest rates by 50 basis points cumulatively is 22%.

If the Federal Reserve cuts interest rates by 25BP this month, which meets market expectations, it will put pressure on the US dollar and support a rebound in oil prices.

From a technical perspective, the current US crude oil daily chart has been swallowed up, but there is still an upper shadow line left. The market lacks the motivation and determination to rise, and the price remains below the moving average. If it cannot effectively stabilize at $69 in the short term, it will remain at a low consolidation level.

At the 4-hour level, the current rebound is constrained by moving average pressure, and MACD's upward momentum is weak. In the short term, the possibility of a second retracement cannot be ruled out, and the focus is on waiting for direction selection.

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