August 15, 2022 15:29:47
WTI crude oil started the new week on a lower note. The crude oil price fell more than 3% amid a cautious market mood. A global recession fear and rebound in the greenback provided a tailwind for the price.
Disappointing Chinese economic data raised concern about the already dimmed outlook of energy demand. Industrial production growth in the top oil importer and the world’s second-largest economy missed the market expectations.
The Industrial production rose 3.8% on a yearly basis in July against the market expectations of 4.6%, and after a 3.9% rise in June, indicating a sluggish recovery from the extended Covid lockdowns in Q2. In addition to that, property investment fall by 12.3% in July.
And on top of that, a probable Iran nuclear deal as notified by the Iranian Foreign Minister that if Iran’s red lines are respected, also added extra sensitivity to the prices. If the deal happens, it means additional players in the market.
The news came when OPEC’s projected a decline in oil demand and a supply increase. Also, Saudi Aramco is said to increase crude output to its maximum capacity of 12 million barrels a day.
The U.S dollar index rebounds above 106.00 with more than 0.66% gains.
As of press time, WTI/USD is reading at $88.38, down 4.56% for the day.
WTI Aims To Test $75.0
On the daily chart, the crude oil prices form lower highs and lower lows, thus forming a descending trading channel since June 8. The price fell from the highs of $120.0 and depreciated nearly 28% since then.
Currently, the price is taking support near the six-month critical support zone around $85.0 and $87.0. However, the selling pressure remained intense as the price remained pressured below the 100-day exponential moving average.
A daily close below $85.0 amid sustained selling pressure could amplify the selling pressure towards $75.0.
However, a bounce back toward $90.0 could challenge the bearish outlook. Bulls would first try to meet the 0.23% Fibo. Retracement level at $95.0 followed by the psychological $100.0 mark.
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