. Oil Price Rises on Optimism Over Debt Ceiling as Bullish Triangle Emerges

Oil Price Rises on Optimism Over Debt Ceiling as Bullish Triangle Emerges

Oil Price Rises on Optimism Over Debt Ceiling as Bullish Triangle Emerges

23 May 2023

Oil price rises on confidence over the debt ceiling as a bullish triangle develops.

  • Oil price continues to recover slowly amid growing optimism The US Congress will agree to raise the debt ceiling. 
  • On the 4-hour chart, a bullish triangle price pattern develops, adding to the evidence that the bearish trend may be changing.  
  • The release of API inventory data later Tuesday may cause some volatility in the movement of Crude Oil prices.

Tuesday’s oil price trading is a little bit higher, continuing the week’s comeback from the weak opening. The uncertainty around the US debt ceiling causes a lack of volatility in the financial markets. Should there be a default, US demand would drastically decline, which would drive down oil prices. Since history indicates that a last-minute agreement is the norm, optimism following Monday’s negotiations raises prospects.

WTI oil is currently trading in the mid-$72 range, while Brent crude oil is trading in the lower-$76 range. On the 4-hour chart, a bullish right-angled triangle has developed, challenging the general bear trend.  

Market movers and news about oil

  • Tuesday sees a little increase in oil as US politicians continue their discussions to raise the debt ceiling and prevent a US default. 
  • After the meetings on Monday, Republican House Leader Kevin McCarthy expressed confidence, saying, “I believe we can still get there.” I have faith that we can succeed. adding that he felt the discussions had been the most fruitful thus far. 
  • After major economies battled during the G7 summit in Japan, fears about global trade led to a sharp decline in the price of oil at the start of the week. 
  • China further irritated the US by forbidding shipments of memory chips made by US company Micron due to security concerns.  
  • Oil prices would be affected by a higher result, which would indicate rising supply, while a lower result would have the opposite effect. 
  • The US Dollar may be impacted by the S&P Global PMI data at 13:45 GMT as well. If the data exceeds expectations, the US Dollar may strengthen and weigh on Oil prices, and if it is lower, the opposite may be true.