Crude oil futures prices were stable in early trading on Thursday, following losing nearly 10% over the past two sessions, due to concerns regarding the outlook for global economic growth and rising coronavirus cases in China.
By 8:00 GMT
- Futures prices for February 2022 delivery of West Texas crude oil (WTI) fell on the New York Mercantile Exchange by 0.86%, to settle at $73.47 per barrel on the New York Mercantile Exchange, following falling sharply during yesterday’s trading by -4.81%.
- Futures contracts for February 2022 delivery of Brent crude oil on the ICE Futures Europe exchange decreased by 0.69%, to settle at $78.33 per barrel, following declining in yesterday’s trading by -5.19%.
(Futures contract is a contract that obliges the buyer to buy a specific asset at a predetermined price, and delivery takes place at a later time in the future)
Crude oil 2023 started with sharp losses on Tuesday following recording annual gains in 2022, as aggressive tightening of monetary policy by the Federal Reserve and other major central banks raised fears of a global economic slowdown, and analysts said that these concerns affected crude oil prices and sentiment. market in general.
Investors are weighing optimism regarding the lifting of tough restrictions imposed by China to curb the spread of the COVID-19 virus, which have slashed demand from one of the world’s largest energy consumers, once morest fears of rising infection rates. As for other countries, they are very cautious regarding China, and a large number of them have announced travelers coming from China to take a COVID test or ban travelers just like Morocco.
The European Union was considering restrictions on passenger travel 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 regarding half an hour before the settlement of oil futures contracts for the session, showed that none of the 19 senior Fed officials expected that it would be Appropriate interest rate cut this year.
Separately, the EIA’s weekly report on US oil supplies will be released on Thursday, a day later than usual due to the New Year holiday on Monday. Analysts expect the report to show an increase of 4.5 million barrels in domestic crude oil inventories for the week ending December 30, and analysts also expected a weekly decrease in supplies of 1.6 million barrels for gasoline and 1.4 million barrels for distillate.
Technical analysis of crude oil futures prices – Oil is deepening its losses
The futures prices for light crude oil, the American measurement (LIGHT CRUDE OIL FUTURES) on NYMEX, settled down during their recent trading on intraday levels, achieving slight daily gains until the moment of writing this report, by 0.66%, to settle at $73.33 per barrel.
The decline in oil comes amid negative signals in the relative strength indicators, and with continuous negative pressure for its trading below the simple moving average for the previous 50-day period. In addition, oil moves within the range of a bearish corrective price channel that limits its previous trading in the short term, as shown in the attached chart for a period of time ( daily), to break the important support level 76.25 in yesterday’s trading.
Graph generated by platform TradingView
Therefore, our expectations indicate a further decline for oil during its upcoming trading, as long as it stabilizes below 76.25, to target the pivotal support 70.00.