Crude oil prices fell nearly 5 percent on Tuesday to their lowest level in nearly nine months on signs of an agreement to resolve a dispute that has halted oil production. of Libya and exports. It was the biggest daily drop since June 2024.
Also, global energy demand concerns weighed on crude prices after Chinese and US manufacturing activity contracted more than expected. Losses in crude oil accelerated Tuesday after a Libyan central banker said that a deal appears imminent to resume the country’s crude oil production.
West Texas Intermediate (WTI) fell $3.77, or 4.9 percent, to $73.75 a barrel, the lowest since Dec. 12. down $3.21, or 4.4 percent, at $70.34 on Monday – the lowest since December – as the U.S. Labor Day Holiday.
The speculation about a deal was triggering momentum selling, said Ole Hansen, an analyst at Saxo Bank. Libya’s National Oil Corp (NOC) declared force majeure on its El Feel oilfield from Sept. 2.
Total production had plunged to little more than 591,000 barrels per day (bpd) as of Aug. 28 from nearly 959,000 bpd on Aug. 26, NOC said. Production was at about 1.28 million bpd on July 20, the company said.
Ahead of the news of more Libyan supply possibly returning to the market, prices had fallen on the belief that demand was being undercut because of sluggish economic growth in China, the world’s biggest crude importer.
China reported on Monday that new export orders fell for the first time in eight months in July and that prices of new homes rose in August at their weakest pace this year.
Further, Some supply is set to return to the market as eight members of OPEC and affiliates, together known as OPEC+, are scheduled to boost output by 180,000 bpd in October. The plan is likely to go ahead regardless of demand worries, industry sources said.
Disruptions to supply flows from the Middle East after two oil tankers were attacked on Monday in the Red Sea off Yemen were not enough to buoy prices. The tankers did not sustain major damag
Today, US JOLTS jobs opening data will in Focus that will drive the next direction for the prices.
Technical Outlook : Crude oil Futures
Oil fell nearly 5 percent yesterday, the biggest one-day drop since June 3, 2024. Prices fell from 5,913, the lowest level since Jan. 15, 2024, to 5,915. Monday’s close at 6222.0
On the above chart, the price broke its key support at 5950 and formed a long candlestick. Currently, prices are trading below a multi-week delivery zone. All the technical aspects will come down in the near future.
After a major decline, however, prices may settle at 5950-6050 before the next big move. Although the next major support is 5850, a break below will only extend the decline to 5775-5690.00
So be careful as the various snaky headlines move to price action.
Happy trading!
Commodity Samachar Securities
We Decode the language of the market
Also Read: US JOLTS, PMI Data Key Focus in Today’s Market “Nifty’s Winning Streak on the Line as Global Markets Signal Bearish Opening”
Recommended Read: Put-Call Ratio: How Does It Influence The Trader Mindset?
Want help on your Trade?
Chat with RM