Last week we witness a sharp drop in crude oil prices due to an extension of lockdowns in the city named Chengdu. Furthermore, uncertainty in demand and supply discounted the market and become the major reason for the fall in prices.
China is the leading importer of crude oil worldwide. Moreover, a recurrent series of lockdowns due to a pandemic may disrupt the demand for oil. Consequently, may hamper the prices this year.
Several restrictions on traveling took place which people are expecting may happen due to an Autumn Festival Celebration in China. Furthermore, may spike road travel thereby ultimately increasing the demand for oil.
China’s economic growth slowed down due to an outburst of Covid-19. A massive number of cases results in several city lockdowns which therefore diminished the demand for oil.
Looking into last week’s performance the crude oil hits the seven-month low. Therefore, traders are expecting supply constraints by Russia which may form a duo with the European energy crunch. Consequently, may boost the prices of oil in the coming days ahead.
Furthermore, markets are now waiting for any global prompts which may be released by OPEC+ in their monthly report. The cluster of people has already reduced the production of oil which thereby limits an upward movement in prices. Therefore, for the first time in 2 years, the oil production levels are now back to their previous ones.
The demand for crude oil diminishes worldwide which is lowering the prices of oil.
Yesterday, CPI data increases the chances of a hike in interest rates. However, a sharp decline was witnessed soon after the release of data.
The market got crashed globally as soon as the CPI data was released. Furthermore, today we have data on crude oil inventory which may influence the prices of oil.
Technical Analysis of Crude oil
Crude Futures has resistance around 7090—7325 and support around 6800—6650.
Traders can sell Crude oil around 7120. We will maintain stop loss above 7325. Downside target looks 6800—6650.
Be cautious and trade within levels…!!
For live market updates and levels stay tuned with us…!!
Happy trading!!
