Crude oil prices has stalled its recent bearish momentum and recovered more than 5% last week, as slightly positive sign in Chinese retail sales, inflation, and industrial production released today morning which have helped to bring some optimism over an economic recovery in the world’s largest crude importer.
Crude demand is expected to surge, on the news that China began relaxing most anti-COVID measures in December. But given that the country is now struggling with its worst yet COVID-19 outbreak, the timing of such a recovery remains uncertain.
Further, data released showed China’s oil refinery output in 2022 had fallen 3.4% from a year earlier for its first annual decline since 2001, though daily December oil throughput rose to the second-highest level of 2022. The country’s crude oil imports were up 4% in December and a considerable demand boost for transportation fuel .
Moreover, reports from the Organization of the Petroleum Exporting Countries (OPEC) today and the International Energy Agency (IEA) on Wednesday will shed more light on the strength of oil demand while recession fears loom.
Technical Levels of Crude Oil
Technically, the weekly price action resulted in formation of a bullish harami candlestick pattern, which is indicating bullishness in near future. It’s expected that Crude oil may test its immediate resistance 6700 very soon.
However, any comments about the global economic situation from the World Economic Forum in Davos may change the sentiment of the entire market. Hence, advice to trade with strict stop loss.
On the downside, 6415 will act as a major hurdle and traders may go long with stop loss below 6415.00.