This morning, WTI crude oil is selling for less than $100 per barrel, which is the lowest price since April 2022. The cost of oil decreased by 8% yesterday.
The recent decline in black gold prices may be due to increased investor concerns that the world economy, and particularly the European economy, could experience a recession. Additional limitations resulting from fresh COVID-19 breakouts in China and the strongest US currency in 20 years are added to this.
Today’s statistics on U.S. inflation might reach 8.8 percent, which would be the greatest rate of price growth since 1981. Core inflation, however, is anticipated to drop from 6 to 5.7 percent for the second consecutive month. Core inflation in the US reached its highest point in March when it was 6.5 percent. The Federal Reserve’s intentions to raise interest rates by another 75 basis points, though, don’t seem to be changing, which may fuel concerns about a recession and drive up oil prices.
The API data, which revealed that crude oil stockpiles increased by 4.76 million barrels last week, may have also been a market-draining factor. Stocks of gasoline and distillates both increased by 3.3 million barrels each.
Although at a slower pace than in 2022, OPEC predicts that oil consumption will rise in 2023. An anticipated economic rebound after a downturn or recession in 2022 and an improvement in the coronavirus epidemic in China may support this. Additionally, to cut petroleum prices this week, US President Joe Biden could advocate for higher production from Saudi Arabia during a visit there.
Lower inflation expectations may be favored by a decline in the price of oil as well as other commodities like industrial metals. This can lead the market to speculate more and more about a possible break in the Fed’s program of monetary tightening. After a catastrophic first half of the year, certain financial markets may be able to take their breath should this truly occur.
The RBNZ boosts interest rates by 50 basis points while the New Zealand currency stabilizes. The difficulty in clearing the supply zone at 0.6200 indicates that the sell-side is still in control of the direction. Short-term sellers were compelled to remove some chips from the table as the RSI once again plummeted into the oversold region. The next support level is 0.6080, and a break of it may push the kiwi as low as 0.6000 psychologically. Before changing the tone, the bulls will need to overcome resistance above 0.6200 on the upside.
WTI oil prices drop as traders get concerned about a slowdown in demand. After the price was unable to maintain its position above the psychological threshold of 100.00, a bearish MA cross on the daily chart suggests that mood has deteriorated. The most recent recovery was under pressure around 105.00 and found it difficult to hold onto its gains over 98.00. A bearish breakthrough draws additional momentum sellers and might start a fresh sell-off in the direction of 91.00. The bears may decide to take profits as a result of an oversold RSI, but trend followers may make offers at 99.00.
As investors continue to be vulnerable to a worldwide slowdown, the FTSE 100 declines. The bulls are attempting to hang onto the current rise as the price movement is in a contracting range between 7020 and 7280. The 30-day moving average and the upper border make it a crucial obstacle to overcome before a sustained rebound may take place. Otherwise, the initial support at 7110 would be the direction of least resistance, which would be downward. If 7020 is broken, the comeback will be invalidated, and a further down below 6800, the bottom from March, would result.