WTI and Brent Are seeing further drops in demand fears. Inflation in China and a slowly improving economy Keep the issue of demand in mind.
WTI and Brent crude oil uneasy on demand worries
FUNDAMENTAL OUTLOOK FOR WTI
Due to the lack of a trigger, prices for crude oil have been unable to profit from the price increase that occurred this past week. After following the OPEC+ announcement. Markets are analyzing Friday’s NFP data and demand worries. Which were made worse by lower-than-expected overnight Chinese inflation data.
The market increased the likelihood of a 25bps hike at the Fed’s May meeting. As a result of the strong NFP data released on Friday. This appeared to have stopped the price of oil from rising further as we began the week.
The Dollar Index, nonetheless, has shown signs of weakness this morning. As it attempts to end a four-day bullish trend that has supported oil prices at the beginning of the European period.
Both WTI and Brent Crude are not impressed by OPEC+ cuts. Demand. Still a concern
Due to the slow pace of the post-covid recovery. The eagerly anticipated surge in Chinese demand has not materialized. This, along with a slowdown in exports, points to a worldwide pattern of easing consumer demand for goods.
Some people have interpreted OPEC+’s decision to reduce production as a reflection of the environment at the time. Simply put, OPEC+ would not have felt required to step in if demand had been elevated, which seems to support the market’s general issue.
Fed policymakers Harker and Kashkari will speak later today and API crude oil stock change information for the week ended April 7. This will also be available. Before tomorrow’s eagerly awaited release of the US CPI print and the Fed minutes. The remarks made by the Federal Reserve officials in particular could help or hurt the dollar and have an impact on oil prices.
UPDATE ON BRENT CRUDE OIL
Bent Over the past week, prices have followed the same path as WTI. The OPEC+ announcement left a void, and tomorrow’s US data is expected to act as an impulse for further declines in oil prices. The 50 and 100-day MAs are offering support near the $82.39 and $81.43 levels, respectively, As Brent is presently on a three-day losing run, despite trading in a range that is fairly narrow.
Technical outlook and closing views for WTI
We tend to lean toward a further drop in oil prices until the price gaping from the previous weekend is closed. Given the growing demand concerns and the possibility of a further rate increase from the Fed in May.
Currently, a decline toward the 50-day MA that corresponds with the hole left by the OPEC+ announcement is at the $75.64 level. In order to identify a likely retesting of the 200-day MA at the $83.39 mark. A daily candle close above the $81.80 top of April 4 is required. At this point, more upside stays uncertain.
