Today, in Asia crude oil upsurges and opened higher in the morning session thereby falling abruptly during the previous trading sessions. We all are aware of the fact that China is the second-largest fuel carrier in the whole world.
Covid-19 outbreaks due to which lockdown continues in China. However, Shanghai, the city in China has now entered in a fourth week. Furthermore, Beijing considers being the largest shopping district which is now running in orders for massive testing. Consequently, there is a possibility of the continuation of lockdown.
Additionally, there was a fear all over China that if the lockdown continues then the demand for fuel will drive.
Predictors predict that the coming five days will decide the major move for crude oil prices. Also, the testing of around 12 districts and a million barrels a day which hits China due to lockdown sounds to be a major cause of this verge. But still, wait for some time till the trend clears.
If we look into yesterday’s trading session, then both Brent & WTI was down by 4%. Moreover, a fall of $6 a barrel in WTI and $7 a barrel in Brent.
Meanwhile, the US dollar regained its importance and made a two-year high thereby continuing to remain on investors’ radars. However, making oil luxurious for other currency holders.
Analyst at a guess that for energy traders only supply fears are not the prominent focus to be made on. Additionally, Dollar is rolling up in direction thereby adding extra pressure across all other several commodities.
Technical view
Crude oil is currently trading around $98.50 INR 7550. For the last few weeks, it has been trading in a range from $92.50 to $108.00 INR 7200 to 8400. On the Nymex Divison, Crude oil is having crucial support of $92.50—$90.00 INR 7050—6800. Further downside panic in Crude oil prices we expect only on a weekly close below $90.00 INR 6800 levels.
If crude oil is able to breach the support level of $90.00 INR 6800 then only we predict a short-term downtrend or else it could bounce from the lower levels again. Geo-political tensions are on and we are expecting that Crude oil will breach its crucial support level in near terms until and unless any major good news comes from Russia-Ukraine or from oil countries. Most countries are in focus to reduce inflation but it’s not so easy.
Traders can buy and accumulate Crude oil in a panic around $94.00—$92.50 INR 7200–7050 with a stop loss below $90.00 INR 6800 on a weekly closing basis for the initial upside target of 105.00 INR 8000.
Are we heading towards $135 or $65.00 on the Nymex Division?
Traders should focus on geopolitical factors and trade with strict stop loss. No one will give you a guarantee in the market. The market is highly volatile. So trade with options strategies to minimize your risk.