Due to Covid-19 lockdowns, China has major concerns about the growth rate. China releases the data on factory activity which slows down due to residential and commercial lockdowns. However, impacts adversely and hits down the prices of crude oil. In the world, China is the leading consumer of crude oil and due to a major dip in factory business, it hampers the economy as well as the crude oil future prices.
Furthermore, China’s manufacturing PMI falls down to 46.0 in the month of April. Earlier in the month of March, it was 48.1. Predictors forecasted at 47.0. But could not make it and made a 26th-month low.
Moreover, it has been two months, the economy of China is contracting day by day due to stringent lockdowns.
Market reveals that both production & new orders demolish at a sharp pace since the inspection begins in the year 2004. Moreover, it has been more than two years since export orders are being cut off. Any growth issue that arises in China clearly impacts the prices of crude oil. Since China is the biggest consumer of crude oil and if that country faces growth concerns then this could be a red sign for our growing economy.
On Monday morning, we clearly saw a dip in crude oil prices. Moreover, due to the FED meeting, this week sounds highly volatile for the commodity market.
The economy of China is deteriorating bit by bit. Immense Covid-19 testing is taking place which is worsening the economic health of the country.
Technical View
Crude oil is the most volatile commodity nowadays. Crude oil is trading at around $102.00 INR 7800. A decisive close below $99.50 INR 7650 will see more downside panic till $97—$95.50 INR 7400—7250 levels.
Immediate resistance at $106.50 INR 8100
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