Crude oil futures prices were stable in early trading on Thursday, after shedding nearly 10% in the past two sessions, on concerns over the global economic growth outlook and rising coronavirus cases in China.
Before 8:00 GMT
- Futures prices for West Texas crude oil (WTI) February 2022 delivery fell 0.86% on the New York Mercantile Exchange to trade at $73.47 a barrel on the New York Mercantile Exchange after falling sharply during yesterday’s trading by -4.81%.
- Futures contracts for February 2022 delivery of Brent crude oil on ICE Futures Europe fell 0.69% to trade at $78.33 a barrel, following yesterday’s -5.19% decline.
(Futures contract is a contract that obliges the buyer to purchase a specific asset at a predetermined price and delivery occurs at a later time in the future)
Crude oil started 2023 Tuesday with steep losses after posting one-year gains in 2022 as aggressive monetary policy tightening by the Federal Reserve and other major central banks raised fears of a slowdown in the global economy and analysts said. said these concerns have impacted crude oil prices and broader market sentiment.
Investors weigh optimism about lifting China’s stringent restrictions to curb the spread of the COVID-19 virus, which have sharply reduced demand for one of the world’s largest energy consumers, amid fears of rising infection rates . As for other countries, they are very cautious about China and a large number of them have announced travelers from China to take a COVID test or ban travelers just like Morocco.
The European Union was considering restrictions on travel by passengers from China on Wednesday, but China backed down with a threat of countermeasures.
Meanwhile, oil prices extended their losses following the release of the minutes of the Federal Reserve’s monetary policy meeting in December, and the minutes, which were released about a half hour before settlement of oil futures contracts for the session , showed that none of 19 top Fed officials expected there would be an appropriate cut in interest rates this year.
Separately, the EIA’s weekly report on US oil supplies will be released on Thursday, one day later than usual due to the New Year’s holiday on Monday. Analysts expect the report to show a 4.5 million barrel increase in domestic crude inventories for the week ended Dec. 30, and analysts also expect a weekly decrease in supplies of 1.6 million barrels for the week. gasoline and 1.4 million barrels for distillate.
Crude Oil Futures Price Technical Analysis – Oil is picking up its losses
Futures prices for light crude oil, the US measure (LIGHT CRUDE OIL FUTURES) on the NYMEX, have stabilized during their recent trading at intraday levels, posting small daily gains as of the time of writing of 0. 66%, to settle at $73.33 per barrel.
Oil’s decline comes amid negative signals in relative strength indicators and with continued negative pressure to trade below the previous 50-period simple moving average. Furthermore, oil is trading within the range of a channel corrective price point limiting its previous short-term trading as shown in the attached chart over a period of time (daily) to break the important support level 76.25 in yesterday’s trading.
Chart generated by the platform TradingView
Therefore, our expectations point to further declines for oil during its next few trades, provided it stabilizes below 76.25, to reach the pivotal support at 70.00.
