Oil Under Pressure
Oil prices have come under fresh pressure today amidst the global risk off moves we’re seeing. The sell off comes despite OPEC upgrading its oil demand outlook in China for the year ahead. OPEC upped its forecast for the world’s second largest consumer of oil to 710k barrels per day over 2023 citing the relaxing of the country’s Covid restrictions and border controls. This figure was up sharply from the 590k barrel per day figure cited in the previous month’s outlook. The reopening of the Chinese economy is forecast to add significantly to global growth in the year ahead, according to OPEC.
Demand Downgrades Elsewhere
However, while Chinese demand is set to build this year, OPEC was keen to warn of the downside risks to the global economy from higher interest rates. On the back of the collapse of SVB, OPEC warned over the prospect for a fresh financial crisis which would have negative consequences for world growth and oil demand. In light of this there were some downward revisions in the United States and Europe which meant that total oil demand for the year ahead was forecast to hold steady at 2.3%, rising by 2.32 million barrels per day through the year.
Technical Views
Crude Oil
Following the failure at 81.40, crude prices have turned sharply lower in recent weeks, breaking down through the 76.49 level mid range. Prices are now testing the bottom of the range, moving below 72.61 to test last year’s lows. With momentum studies bearish, risks of a further break lower are seen unless bulls can reclaim the 76.49 level quickly.
.png)
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.