Crude oil prices extended losses from Friday to start the week. Brent crude hit its lowest since January after data showed the US economy created fewer jobs than expected last month and weak Chinese economic data added pressure.
US job growth slowed more than expected in July and the unemployment rate rose to 4.3%, raising concerns about a possible recession.
Economic data from top oil importer China and surveys showing weaker manufacturing activity in Asia, Europe and the United States have raised the risk of a sluggish global economic recovery, which would weigh on oil consumption.
Falling manufacturing activity in China also inhibited prices, adding to concerns about demand growth after June data showed imports and refinery activity lower than a year earlier.
Asia’s crude imports in July fell to their lowest in two years, sapped by weak demand in China and India, data from LSEG Oil Research showed.
Meanwhile, OPEC oil output rose in July, a Reuters survey found, as a rebound in Saudi Arabian supply and small increases elsewhere offset the impact of ongoing voluntary supply cuts by other members and the wider OPEC+ alliance.
The Organization of the Petroleum Exporting Countries pumped 26.70 million barrels per day (bpd) last month, up 100,000 bpd from June, according to the survey based on shipping data and information from industry sources.
An OPEC+ meeting on Thursday had left the group’s oil output policy unchanged, including a plan to start unwinding one layer of production cuts from October.
Further, the Middle East, where Lebanon’s Iran-backed group Hezbollah said its conflict with Israel had entered a new phase. Still, analysts noted no material disruption of oil supplies from the region as prices slumped to multi-week lows days after the killing of senior leaders of Iran-aligned militant groups Hamas and Hezbollah stoked fears of all-out war.
Technical Outlook of crude oil prices
After hitting a multiple week low of 6,025, Crude oil prices rebounded sharply and settled at 6,156 compared to the previous day’s close of 6,146.00.
The intraday price action resulted in a formation of a hammer candlestick which is indicating trend reversal. However, the prices would need to break above 6,260 in order to recover towards 6,380-6,450.00. Else, any rise will attract selling pressure again, and it could test next support 5980 very soon.
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Commodity Samachar
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