Oil prices moved limitedly from the beginning of the week until Thursday's trading (26/January). Brent Oil was in the range of $86.17 per barrel.

Meanwhile, WTI (West Texas Intermediate) oil was held at $80.20 a barrel since yesterday's session open. After trying to bounce back from a slump late last year, the rally in oil prices has been on hold since the beginning of this week. 

This is seen in the section marked with a white box on the chart above. The reason is that market participants liquidated their Long positions while wait-and-see for the various dynamics.

It is especially those which have occurred in the oil market recently. The recent release of some disappointing US economic data signals a potential recession.

Oil Market Optimism Has Dimmed

Elsewhere, the erodes market optimism about the outlook for oil demand going forward also one of the reason. People see that oil market optimism has dimmed somewhat due to concerns about the demand outlook. 

In short, the market's biggest fear right now is a demand collapse as it is triggered by an economic slowdown. This was said by Robert Yawger, a commodities analyst at Mihuzo Securities. 

On the other hand, the Fed's dim interest rate expectations also supported this commodity prices. That is why the bullish and bearish forces of oil tend to be balanced.

That must be hold the price in the current range. The latest United States crude oil reserves report did little to impact despite failing to meet expectations. 

US crude Oil Reserve is Quite Small

However, Price Futures Group commodities analyst, Phil Flynn, is watching these developments carefully. When the analysts look at it in a broader scope, then the addition of oil stocks below expectations can raise concerns about the supply outlook. 

They also see that the current volume of United States crude oil reserves is still relatively small. Market attention in the near future will shift to the OPEC+ meeting on February 1. 

The market expects Saudi Arabia et al. to maintain their production policy as in previous months. It is essential to stabilize the position of this commodity.

Elsewhere, Canada's central bank (BoC) raised their interest rates again by as much as 25 basis points to 4.5 percent. However, they also stated that it is time to stop the cycle of rising interest rates. 

USD/CAD Soared by 0.4%

Traders reacted negatively to the announcement, so the Canadian dollar became monthly in the financial markets. USD/CAD soared about 0.4 percent to a high of 1.3428.

That was following the BoC announcement, before slipping to a range of 1.3415 when this news was written midway through the New York session. Regardless, many voted to wait-and-see until next week's Fed FOMC meeting to take more significant decisions.

The BoC revealed that a follow-up rate hike of 25 basis points was well-founded amid stronger-than-expected growth and current tight labor market conditions. 

However, they added that there is growing evidence that restrictive monetary policy is slowing down (economic) activity. It is especially related to household spending.

Economic Growth in Canada will stall This Year

The BoC also anticipates a slowdown in business investment as the impact of rising interest rates expands. The BoC predicts Canada's economic growth will stall in mid-2023.

Then it may climb slightly towards the end of the year. Canada's inflation projections are expected to decline "significantly" in the coming months, then fall back to the 2 percents target by 2024. 

In line with that, Bank of Canada argues that it is the time to end the cycle of rate hikes. Their next task is simply to monitor the impact of that policy on the economy.

If economic development develops broadly in line with the MPR (BoC) outlook, the Board of Governors expects to maintain interest rate policy at current levels while evaluating the impact of cumulative rate hikes.