CRUDEOIL Analysis
Afternoon: Crude Oil Market - Bearish Sentiment Amid Demand Concerns
Highlights:
- Demand concerns persist, particularly from China, despite new stimulus measures.
- OPEC+ plans to restore output could lead to a potential global surplus.
- Geopolitical tensions in the Middle East continue to influence market sentiment.
Overview:
Crude oil prices have recently dipped to around $69.80, reflecting a bearish sentiment in the market primarily driven by concerns over weak demand, particularly from China. The world's largest crude importer has announced a reduction in key lending rates as part of its stimulus package aimed at bolstering its economy. However, these measures have not fully alleviated worries regarding the country's demand outlook. Traders are keenly awaiting clearer indicators of improvement in China, as any signs of economic recovery are crucial for oil consumption.
Additionally, the market is bracing for a potential surplus as OPEC+ plans to restore output in December, which could further exacerbate the supply-demand imbalance. Compounding these concerns, investors are closely monitoring geopolitical developments in the Middle East, particularly the anticipated response from Israel following recent missile attacks from Iran and Tehran-backed proxies. These factors have added layers of complexity to the crude oil market, as traders balance demand-side weaknesses against supply-side risks.
Key economic data slated for release includes Public Sector Net Borrowing and BOE Governor Bailey's speech from the GBP zone, alongside the Richmond Manufacturing Index and remarks from FOMC member Harker in the US.
Support and Resistance Levels:
- Crude Oil Prices: Support at $68.50; Resistance at $71.20
- Crude Oil MCX Prices: Support at 5850; Resistance at 6120
Trading Action:
- Action: Buy on a drop around $69.50, targeting $70.80, with a stop loss below $68.50.
Support and Resistance Levels:
