Oil loses ground as the market prices in weak demand from China. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• Oil loses ground as the market prices in weak demand from China.
• Russian threats to halt oil exports lends some support.

The pair currently trades last at 82.23.

The previous day high was 89.25 while the previous day low was 85.99. The daily 38.2% Fib levels comes at 87.23, expected to provide resistance. Similarly, the daily 61.8% fib level is at 88.0, expected to provide resistance.

West Texas Intermediate crude is under pressure midweek, losing some 5% in Midday New York trade and taking out key support territory as the greenback rises to a 20-year high at the same time the market prices in weak demand from China.

The headlines are dominated by the Covid-19 lockdowns in China, the world’s No.1 net importer. and the worries as restrictions on movements that are now impacting 46 cities. As many as 65 million people across the country are now subject to restrictions on their mobility and the dent to demand is expected to quickly ripple through international markets already grappling with fears that the global economy is barreling toward a recession.

”More infectious strains of the virus are raising concerns that authorities will be forced to more frequently lockdown areas as China persists with a zero-COVID strategy,” analysts at ANZ Bank explained.

However, Russian threats to halt oil exports should the G-7 and European Union plan to cap prices for Russian oil go forward offered some support for oil. Nevertheless, a decision this week by OPEC+ to lower production quotas by 100,000 barrels per day has also been taken into consideration.

Analysts at TD Securities said that this signals that this group of swing producers will be increasingly active in its decision-making as we stare down the barrel of the recession. ”In turn, energy supply risks should also be bolstered by the revival of the OPEC+ put. The right tail in energy markets is fattening,” the analysts argued.

Meanwhile, the Energy Information Administration (EIA) on Wednesday slightly raised its forecast for 2022 global oil demand while trimming its estimate for production this year.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 82.23 at the time of writing. Pair opened at 86.71 and is trading with a change of -5.17 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 90.36, 50 SMA 94.25, 100 SMA @ 101.77 and 200 SMA @ 95.49.

The previous day high was 89.25 while the previous day low was 85.99. The daily 38.2% Fib levels comes at 87.23, expected to provide resistance. Similarly, the daily 61.8% fib level is at 88.0, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 85.38, 84.06, 82.12
• Pivot resistance is noted at 88.64, 90.57, 91.9

[/s2If]
Join Our Telegram Group