The crude oil price fell by more than six percent at the beginning of the month. Concerns about the effectiveness of extending OPEC+ cuts in reducing supply due to weakening Chinese demand weighed on sentiment.
Brent crude oil futures fell to $77.05 a barrel. US WTI crude futures fell to $72.16 per barrel. MCX Crude fell 0.77% to 6,033.00 today.
The Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+), agreed to a voluntary production cut of about 2.2 million barrels per day in the first quarter of 2024 at a meeting late last week. Saudi and Russian officials added this week that the cuts could be extended or deepened beyond March. But both benchmarks closed the last session at their lowest levels since July 6, marking four consecutive days of losses.
In addition, Moody’s downgraded the Chinese government’s credit rating to stable negative. The rating agency calls China’s growing growth risks and a crisis in the real estate sector. This development warns lenders that the risk of default has increased in recent years. Despite this, China’s pessimistic economic outlook could limit WTI’s gains as China is the world’s largest oil consumer, adding pressure.
Rating agency Moody’s on Tuesday downgraded China’s outlook and rating to A1 from stable to negative, citing increased risks related to structurally and persistently slower medium-term economic growth and continued contraction in the real estate sector.
Russian President Vladimir Putin will travel to the United Arab Emirates and Saudi Arabia on Wednesday to meet with UAE President Sheikh Mohammed Bin Zayed Al Nahyan and Saudi Crown Prince Mohammed bin Salman. The Kremlin has announced that the oil and OPEC+ deal is on the agenda.
Looking ahead, US ADP employment in November and EIA crude oil inventories are out later today. The highlight of the week will be US non-farm payrolls (NFP) data on Friday. These macroeconomic indicators can make a big difference.
China will release preliminary trade data, including crude oil imports, on Thursday. Although the CPI on Saturday, which is significant information about it.
Technical Outlook
From 30.11.2023 crude oil turned negative again. Prices are down by more than 6 percent. After reaching a high of 6,644, prices recently fell to 6,025. Today trades at 6025 down 0.90%.
According to the Elliott wave drawn on the above chart. As of October 17, 2023, prices are trading below corrective wave C of ABC. Prices are now trading on key support at 5995, which coincides with the previous swing. A break below this could prove to be a sharp decline to 5880-5720.00.
Alternatively, a rise to immediate resistance could be seen at 6245, with a break above that only allowing prices to recover to 6450-6580.
Commodity Samachar
Learn and Trade with Ease
Also Read : Will Dollar Index React to Canada Policy and BOE Speech? , Forex News Letter – Gold, Silver and the AUD/USD!!
Recommended Read : Canada-India Relations: Escalating Tensions and Geopolitical Frictions
Chat With Our Analyst