Crude oil prices had a volatile trade since 6 June 2023. As a cluster of economic indicators and snaky headlines from OPEC+. And U.S. and Iran’s deal continued weighing on the sentiment.
Some below factors are continued holding Crude oil prices indecisive –
- May saw a decrease in Chinese consumer inflation compared to April. While factory-gate inflation fell to its lowest level in seven years, the nation’s economic recovery stalled in the second quarter.
- The readings were added to a succession of dismal economic reports released by the nation during the previous two weeks. Bets that a resurgence in China will drive oil demand to historic highs this year have been further undercut.
- Demand concerns outweighed the prospect of tighter supply. After Saudi Arabia pledged at a weekend OPEC+ meeting to cut crude output by 1 million barrels per day in July. In addition to the group’s larger agreement to extend the current supply curbs beyond 2024, that unilateral decrease was made.
- According to U.S. inventory data, petrol supplies unexpectedly increased last week. Ducking expects that fuel demand will increase as the travel-heavy summer season approaches.
- Signs of a U.S. economic slowdown continued to weigh on sentiment. Recent indicators show that business activity slowed through May, while the weekly jobs claims showed some signs of cooling. The subdued readings pulled down the dollar but offered little support to crude as traders fretted over worsening U.S. growth.
- A rumour that a nuclear deal was imminent was refuted by the United States and Iran, respectively. The news that the United States will ease sanctions on Iran to allow it to export oil in exchange for Tehran lowering uranium enrichment caused oil prices to drop by more than $3. The report was deemed “false and misleading” by a White House National Security Council spokeswoman.
- Focus now remains on the Federal Reserve meeting, scheduled on 14 June 2023. And speculation over rate hikes or pauses will hold indecisiveness in the oil prices.
Technical Outlook
Crude oil prices have been trading in an indecisive mood since 6 June 2023, prices swinging in between the 6100-5700 levels zone. Yesterday, prices settled with a loss of 1.68% at 5903. Now, it’s trading at 5888, down nearly 0.22%.
On the above chart, prices are struggling to cross massive resistance 6120 and retreat towards 5880-5750 levels. A cluster of indecisive candles indicates incisiveness may remain in the near future.
Further, prices are trading near their consolidation support, which is creating a probability for a recovery towards 5980-6080 again. Short-term buying could expect on every dip with a strict stop loss below 5560.00
Alternatively, on the downside, crucial support is seen at 5550 and a break below only, prices will set a new crunch.