Oil prices lost early gains on Wednesday as weak demand and rising supply offset concerns over potential disruptions from Middle East conflicts and Hurricane Milton in the U.S.
In the early hours of today, Brent crude futures was seen to have dropped by 0.47% to $76.82 per barrel, while U.S. West Texas Intermediate (WTI) futures fell by 0.58% to $73.14.
Both Brent and WTI had risen more than 1% earlier in the day, following a steep decline of over 4% on Tuesday due to talks of a potential Hezbollah-Israel ceasefire. However, uncertainty lingers over the possibility of an Israeli strike on Iran’s oil facilities.
Despite remaining higher than last week, Brent and WTI have pulled back from last week’s peaks as traders anticipated Israel’s reaction to Iran’s missile strikes on military targets. For now, Israel’s response has been limited to airstrikes on Lebanon, sparking reports of a potential ceasefire.
Oil prices remained steady in early trading today after a surprising inventory increase in the U.S., which, coupled with China’s decision to refrain from issuing weekly economic stimulus measures, contributed to a bearish sentiment in the market.
In Nigeria, the NNPCL has once again reviewed pump price upward. Before now, a litre was selling for ₦885 in Lagos and around ₦1,000 in other parts of the country. However, with this recent price review, a litre of fuel now sells for ₦998 in Lagos and over ₦1,000 in other parts of the country. The view of many is that this is due to the NNPCL stepping down as the intermediary in the Dangote Refinery acquisition deal.
Summarily, oil prices fluctuated due to weak demand, rising supply, and concerns over Middle East tensions and Hurricane Milton. Early gains in Brent and WTI faded amid uncertainty about Israeli action against Iran. In Nigeria, fuel prices rose after the NNPCL stepped down from its intermediary role in the Dangote Refinery deal.
In the crypto market, Bitcoin is currently consolidating below its 2021 all-time high of $69,000, and top traders believe this period may be the beginning of an ‘explosive’ phase in its four-year cycle. This analysis comes in the context of significant market uncertainty fueled by ongoing geopolitical tensions, the upcoming US presidential election, and concerns regarding the health of the US economy.
There are pointers to the fact that bulls must maintain support for Bitcoin above the upper trendline of a descending broadening wedge pattern. This support is critical for confirming a bullish breakout as the cryptocurrency approaches the close of its second cycle year, historically a prelude to substantial price increases. The third year of the four-year cycle has traditionally been explosive, and investors are encouraged to keep an eye on October for potential upward momentum.
Bitcoin closes its second year in this cycle next month, positioning itself to enter a historically significant phase. A four-year cycle framework has been used by top speculators to identify potential tops and bottoms in the Bitcoin market, suggesting that historical patterns could guide investors in predicting price movements in the current cycle.
There is also a shift in investor sentiment, buoyed by the anticipation of interest rate cuts and a rising institutional interest in Bitcoin, particularly with the possibility of more spot exchange-traded funds (ETFs) becoming available. This evolving landscape has led to a wave of optimism around October, often referred to as “Uptober,” as traders speculate about the potential for a bull run heading into 2025.
Meanwhile, Ethereum is experiencing a notable increase in staking activity. Recent data indicates that nearly 28.9% of all Ether has been staked, reflecting growing confidence among token holders in the long-term viability of the asset. This is a significant rise from January, when only 23.8% of Ether was staked, suggesting that 5.1% more Ether has been staked in just the past ten months. Additionally, 15.3% of staked Ether has been locked for over three years, which underscores a strong belief in Ethereum’s future.
Despite the rising interest in staking, Ethereum’s price has faced challenges. After reaching a yearly high of over $4,000 in March, ETH has since seen a substantial decline of around 40%, currently trading near $2,400. Analysts point to several factors contributing to this downturn, including sell pressure from initial coin offering participants and a lack of demand for spot Ether ETFs. Between October 1 and October 3, ETH’s price fell by 12% after failing to surpass the resistance level of $2,650, erasing gains made in the prior weeks and reflecting a broader bearish sentiment in the market.
Both Bitcoin and Ethereum are navigating a complex landscape of market dynamics, with potential for significant price movements as the end of the year approaches. Investors are keeping a close watch on these developments, weighing both opportunities and risks in a highly volatile environment.
