The commodity oil market has seen increased price volatility for both West Texas Intermediate (WTI) and Brent North Sea crude over the past few days. According to analysts, the tension in oil prices was most caused by the tension in the Middle East region, after the outbreak of the war between Israel and Palestine, prices rose significantly. In particular, oil prices rose after the start of Israel’s ground operation in the Palestinian territory of the Gaza Strip, when the conflict in this area still threatens to expand. Subsequently, however, the price of oil fell under the pressure of concerns about the release of a significant amount of oil reserves from this Middle Eastern region.
Currently, during the European Tuesday morning on October 31, 2023, at approximately 7:38 CET, oil prices changed their trading trend and their price began to rise again, and according to the communication of economic correspondents in connection with analysts of brokerage companies and financial strategists of the commodity market in connection with the expected decision of the central bankers of the United States of America, when today, 31 October 2023, the two-day meeting of the key committee of the central bank of the USA, the Federal Committee for the Free Market FOMC FED (Federal Open Market Committee Federal Reserve System), begins, which is to discuss the current level of interest rates. It is interest rates as the currency of the central bankers’ political tool that significantly affects the exchange value of the US dollar (USD), as the main currency of the global commodity market, and therefore the change in interest rates through the exchange value of the USD will affect the price of oil on the world market. According to analysts, despite the tensions in the Middle East, the so-called inverse rule, which states that oil and gold prices fall when the USD is strong, still has its current validity.
On the indicated day and time, the light American oil WTI (West Texas Intermediate) was traded on the NYMEX (New York Mercantile Exchange) commodity market at a value of USD 83.04 per barrel with a daily gain of +0.89% of its price. This current price of WTI oil, according to technical analysis data, represents a total annual increase of + 8.64% of its price over the last 52 weeks, from which the price has increased by + 7.07% since the beginning of this year 2023. The European counterpart of WTI crude oil, i.e. Brent North Sea crude oil, was traded on the ICE (Intercontinental Exchange Europe) commodity market at a value of USD 88.10 per barrel, with a +0.74% increase in its price so far. This Brent oil price thus shows a total annual growth of +6.08% of the price over the last 52 weeks. According to the price comparison since the beginning of this year 2023 Brent crude oil prices have increased by + 7.79% of its price compared to the price at the end of last year 2022.
These current oil prices as of Tuesday 10/31/2023 during the European morning were reached when the exchange value of the US dollar (USD) was in a trading trend of strengthening according to the data of the dollar index DXY (US Dollar Currency Index), which compares the exchange value of the USD with another six major world currencies. On Tuesday, 31/10/2023, at approximately 7:59 CET, the value of this DXY index was at the point level of USD 106.31 with a daily growth of +0.18% of the point value according to this index. In this situation on the foreign exchange market, when the USD was strengthening, the global currency pair of the single European currency Euro (EUR) and the US dollar (USD) traded at a mutual exchange rate of 1.061 USD per EUR with a daily decrease of EUR by -0.075% so far exchange rate against the USD. According to analysts and financial strategists of investment banks, it can be assumed that the FOMC FED, similarly to the European Central Bank (ECB-European Central Bank), will temporarily leave interest rates unchanged, and the price of oil will thus be all the more strongly influenced by the geopolitical development of the situation in the Middle East.