Global jitters may continue to hold CRUDE OIL Prices under pressure.
Crude Oil witnessed 6.29%, its biggest weekly fall since 23 January 2023. On Friday, Crude oil dropped below its three-week lows, as after strong U.S. jobs data raised concerns about higher interest rates. At the same time, European Union diplomats said the price caps are $100 per barrel on Russian Refined also weighed on sentiment.
Nonfarm Payroll data which jumped significantly supported the dollar. Data showed on Friday, the US economy created 517k jobs last month much above than previous month 260k. Average hourly earnings slowed to 4.4% in January from the prior month, but were above estimates of 4.3%. The unemployment rate fell to 3.4%, the lowest level since May 1969.
European Union countries agreed to set price caps on Russian refined oil products to limit Moscow’s funds for its invasion of Ukraine, the Swedish presidency of the EU said on Friday.
EU diplomats said the price caps are $100 per barrel on products that trade at a premium to crude, principally diesel, and $45 per barrel for products that trade at a discount, such as fuel oil and naphtha.
The Kremlin said the EU embargo on Russia’s refined oil products would lead to further imbalance in global energy markets. The cap follows similar price limits put on Russian oil exports, with the goal of reducing the financial resources Russian President Vladimir Putin has to wage the nearly year-long war in Ukraine.
Crude oil future dropped drastically last week. After hitting a weekly high 6418, it settled at 6097 down by 3.48%. It was the biggest weekly drop since 4 January 2023. Since 27 January 2023, CRUDE OIL Future continued trading on a bearish momentum. We have continued bearish from level 6620-6630, since 25 January 2023. Crude oil futures have not breached crucial resistance 6785 as per the outlook.
Weekly price action resulted in formation of long bearish candlestick. This is yet indicating a bearish momentum in the near future. Further, a bearish pennant pattern is also found on the above chart. But, Crude oil Future would need to break 6090 in order to test 6020-5965.
Adding to this, RSI 14 and its 9 SMA is giving negative crossover is another sign for bearish momentum in CRUDE OIL Future.
However, after the recent drastic fall, there will be a probability for short time consolidation before the next big move. Although, rather than technical aspects, crude oil prices will move according to ongoing global jitters. If Russia- EU jitters will increase than crude oil may break its next support very soon,
Recommendation – Sell below 6090 Target 5975 Stop loss above 6188.
Alternatively, if CRUDE OIL Future failed to break below 6090, then there would be a probability for temporary pullback towards 6200-6350.