Crude oil prices forecast: WTI in free fall amid global turmoil
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- Chinese economic slowdown exacerbates the case of slowing oil demand.
- Market players keep an eye on nuclear discussions between the US and Iran.
- WTI trades near the August low at $86.99 and with a firmly bearish technical stance.
The pair currently trades last at 86.67.
The previous day high was 94.14 while the previous day low was 90.64. The daily 38.2% Fib levels comes at 91.97, expected to provide resistance. Similarly, the daily 61.8% fib level is at 92.8, expected to provide resistance.
Crude oil prices are in free fall at the beginning of the week, with the barrel of West Texas Intermediate currently trading at $86.63, not far from this month’s low at $86.40.
Several factors are weighing on oil prices, the main one being the worsening demand outlook. The data from China showed that the country’s crude throughput fell to its lowest level since March 2020 at 53.21 million tonnes of crude oil in July. That number was also 8.8% lower than the same time last year. Additionally, disappointing Retail Sales and Industrial Production data from China revived concerns over a global recession.
On the supply side, Saudi Aramco’s CEO said on Sunday that they would be able to raise the output to the max capacity of 12 million bpd if requested by the government. Looking ahead, Iran’s response to the EU’s offer to revive the 2015 nuclear deal, which is expected to be announced later in the day, could impact crude oil prices. In case Iran and the US reach an agreement, that could lead to the removal of sanctions on Iran’s oil and gas exports.
The aforementioned August low is the lowest WTI traded since February, which means that a break below it could result in a steeper decline. The initial bearish target and immediate support level is the $86.10 area, where the black gold has several intraday highs and lows from January this year. A bearish breakout could result in a test of the $85.00 figure. The sour tone of equities will likely keep crude oil prices on the downside through the rest of the day.
Should Wall Street recover, WTI may also find some demand. Intraday resistance stands at $88.50 and $90.00. Nevertheless, technical readings support a near-term downward extension, adding to the negative fundamental picture.
Technical Levels: Supports and Resistances
XTIUSD currently trading at 86.67 at the time of writing. Pair opened at 91.36 and is trading with a change of -5.13 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 86.67 |
| 1 | Today Daily Change | -4.69 |
| 2 | Today Daily Change % | -5.13 |
| 3 | Today daily open | 91.36 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 94.01, 50 SMA 101.96, 100 SMA @ 103.78 and 200 SMA @ 94.45.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 94.01 |
| 1 | Daily SMA50 | 101.96 |
| 2 | Daily SMA100 | 103.78 |
| 3 | Daily SMA200 | 94.45 |
The previous day high was 94.14 while the previous day low was 90.64. The daily 38.2% Fib levels comes at 91.97, expected to provide resistance. Similarly, the daily 61.8% fib level is at 92.8, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 89.95, 88.54, 86.45
- Pivot resistance is noted at 93.45, 95.55, 96.96
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 94.14 |
| Previous Daily Low | 90.64 |
| Previous Weekly High | 94.32 |
| Previous Weekly Low | 86.64 |
| Previous Monthly High | 109.54 |
| Previous Monthly Low | 88.34 |
| Daily Fibonacci 38.2% | 91.97 |
| Daily Fibonacci 61.8% | 92.80 |
| Daily Pivot Point S1 | 89.95 |
| Daily Pivot Point S2 | 88.54 |
| Daily Pivot Point S3 | 86.45 |
| Daily Pivot Point R1 | 93.45 |
| Daily Pivot Point R2 | 95.55 |
| Daily Pivot Point R3 | 96.96 |
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