Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The liquidation turmoil facing China’s real estate sector as well as the strong US dollar cause WTI oil to decline by more than 1.50%. Despite geopolitical unrest, worries about the state of the world economy and central bank policies have also caused oil prices to decline.
In light of the uncertain economic outlook, the market anticipates API and EIA releases for information on US crude and distillate supplies.
WTI falls more than 1.60% on Monday due to concerns about demand caused by China’s real estate crisis as well as the fact that it was unable to break through a significant technical resistance level. The American crude is trading at $76.83 per barrel at the time of writing.
The US central bank’s decision to maintain the strength of the US dollar is anticipated by traders despite growing tensions in the Middle East.
Crude Oil struggles to break key resistance, and plunges on risk sentiment. The real estate crisis in China might be about to get worse as a Hong Kong court ordered the liquidation of property giant China Evergrande Group.
The situation in China is the biggest headwind to the whole market; that is why the market keeps backing off from the war risk premium. Oil prices failed to gain traction following an attack to a Russian oil facility; specifically an oil refinery in the city of Yaroslavl.
While the Fed and the Bank of England (BoE) take centre stage this week, the restraint of global central banks maintains oil prices somewhat lower. Rates are projected to remain unchanged at both central banks, with the former supporting the USD.
The US Dollar Index, which measures how six different currencies perform versus the US dollar, is up 0.14% at 103.61, which is negative for assets invested in the US dollar.
All in all, Oil traders are looking forward to the American Petroleum Institute (API) stockpiles report in the US on Tuesday, ahead of the US Energy Information Administration (EIA) on Wednesday.
According to a Reuters poll, US crude Oil and distillates are expected to have reduced last week, while gasoline inventoried were seen rising.
Oil prices were pulled below the 200-day moving average (DMA) at $77.44, intensifying the slide below $77.00 per barrel, and sellers piled in a comeback as WTI failed to break above the 100-day DMA at $79.37.
If the daily close falls below that, the $76.00 mark and the 50-DMA, which is at $73.54, will become visible. The price drops even further to $73.00. On the other hand, if buyers drive the price above $77.00, the 200-DMA will likely be tested.
