What is the Consumer Price Index (CPI)?

What is the Consumer Price Index(CPI)? The Consumer Price Index (CPI) is a measure of the change in prices paid by consumers for a basket of goods and services. It is one of the most widely followed economic indicators, and it is used by investors to gauge inflation and make investment decisions. How is the CPI calculated? The CPI is calculated by the Bureau of Labor Statistics (BLS). The BLS surveys households across the United States to collect data on the prices they pay for goods and services. This data is then used to create a "basket" of goods and services that represents the spending habits of the average American household. The BLS calculates the CPI by comparing the prices in the basket of goods and services in a given month to the prices in the same basket of goods and services in a base year. The base year is usually 2000. How does the CPI affect investing? The CPI is an important indicator of inflation. When the CPI rises, it means that the cost of living is incre

Analyzing the recent volatility in crude oil prices

Analyzing the causes of the oil price decline

Recently, the price of crude oil has been on a continuous downward trend. One of the main reasons for this phenomenon is the lack of market reaction to OPEC+'s decision to cut production. This situation continued even after the decision to cut production, which led to an increase in technical selling, as OPEC+'s decision failed to have a significant impact on the market.


In addition, concerns about oversupply due to increased US crude oil exports also contributed to the decline in crude oil prices. The U.S. exports about 6 million barrels of crude oil per day, which led OPEC+ members to give up more market share as part of the supply reduction agreement.

Analyzing the recent volatility in crude oil prices

Economic conditions and falling oil prices

The current state of the global economy is also contributing to the decline in oil prices. The global economy is in a downturn due to rising interest rates, which is having a negative impact on both consumers and businesses. Furthermore, the aftermath of a surge in inflation and the slow disinflationary process is exacerbating the problem.


However, despite these economic headwinds, the severity of the oil price decline may not be fully justified, given the inelastic nature of demand for crude oil.


Potential for oil price recovery

Further declines in crude oil prices are likely to be limited, given the ongoing supply cuts by OPEC+ producers and the inelasticity of demand for crude oil. In particular, officials from Saudi Arabia and Russia have been quoted as saying that they may extend or increase supply cuts beyond the first quarter of next year, suggesting that such actions could be a major factor in supporting crude oil prices.


Oil price outlook through technical analysis

From a technical perspective, a reversal pattern is needed before the price of crude oil can turn tactically bullish. As such, we see $70.00 as an important support level, which we analyzed as a possible bottoming point for crude oil prices.


Suggested investment strategy

When it comes to investing in crude oil, we recommend that bulls take a cautious approach until we see a clear reversal signal, while bears recommend additional caution. We believe that most of the downside movement has already occurred, so we are leaning towards bullish trade setups rather than bearish on the price of crude oil.


In the end, this analysis should give you a better understanding of the volatility of the crude oil price and help you formulate your investment strategy going forward.