Crude Under Pressure
Crude oil prices have come under fresh selling pressure this week with the futures market turning lower through early European trading on Tuesday. A deterioration in the global demand outlook is weighing on sentiment here as uncertainty over the US/China trade war persists in the absence of any further positive headlines. Last week, crude prices were seen rising in response to positive news flow suggesting the potential for a scaling back of US/China tariffs. With no further updates, however, crude traders have turned focus elsewhere with prices drifting lower accordingly.
OPEC+ Expectations
The risk of a larger-than-signalled production increase by OPEC+ next month is one of the key issues dampening crude sentiment here. Following the recent increase, we saw, which was well above the increase signalled in January, traders are now weary of OPEC+ once again hiking output beyond current guidance.
US Jobs Data
Looking ahead this week, traders will also be closely watching the latest US jobs report on Friday. Recession risks have been a key focal point for traders this year and if US labour market conditions are seen weakening again this is likely to feed into reduced demand expectations for crude, weighing on the market near-term.
Technical Views
Crude
The recovery in crude has stalled for now into a test of the 63.83 level. While this area holds as resistance, a fresh turn lower can be seen towards a further test of 57.42. Above 63.83, 67.45 will be the next hurdle for bulls.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.