Crude oil retreated from the morning high 6333, and is currently trading at 6199. Prices dropped more than 1.50% amid global jitters. Earlier, prices opened slightly positive as a recovery in Chinese demand. And a weaker dollar provided support to a market rattled by the prospect of possible further U.S. interest rate increases.
Market sentiment was fragile as worries about further monetary tightening. By the Fed have been exacerbated by high crude oil inventories in the U.S.
A weaker dollar makes oil cheaper for holders of other currencies, lending support to oil prices.
The failure of Silicon Valley Bank and New York-based Signature Bank. And concerns about possible contagion led to a selloff in U.S. assets at the end of last week. Which has also put downward pressure on the dollar.
Comments on Sunday from Saudi Aramco CEO Amin Nasser on crude demand from China also provided some support.
The comments come in the wake of the announcement that Riyadh. And Tehran had agreed to restore diplomatic relations in a China brokered deal. Potentially paving the way to the revival of a nuclear deal that would allow exports of currently-sanctioned Iranian crude.
Technical View- 6140 will act as a decisive support
Looking at the technical chart, a pennant pattern was noted on the weekly chart which is indicating a bearish momentum in Crude oil prices.
It’s expected that any rise towards 6280-6300 will attract near future selling activities. Further 6140 will act as a decisive support, and a break below it will confirm the next downside level of 6050-5990.
On the upside, immediate resistance is seen at 6455 it may react as a stop loss for short. Further, massive resistance is intact at 6585 levels.