Oil plummets on recession fears, continues decline of previous week

Chicago WTI crude oil futures

The price of Chicago WTI crude oil futures is down 6.84% at $102.03 at mid-Wednesday trades.

Prices of oil tumbled on Wednesday as U.S. president, Joe Biden plans to cut fuel costs for drivers over concerns of a potential economic recession after the Fed recently hike its rate by 75 bps, the highest in nearly three decades. As the United States, the world’s largest oil consumer, struggles to tackle soaring gasoline prices and inflation. President Joe Biden is expected to ask Congress to consider a three-month suspension of the 18.4 cents per gallon federal tax on gasoline and call on states to suspend their fuel taxes on Wednesday.

Oil prices pushed higher on Tuesday on high summer fuel demand while supplies remained tight because of sanctions on Russian oil after its invasion of Ukraine. Investors, on Tuesday, focused on the persistent supply constraints and tightening market conditions.

On the technical side, the RSI of Chicago WTI crude oil futures stood at 33.27 and is currently trading below all SMAs: MA (5), MA (20), and MA (50). So, SELL position can be taken with the following target and stop-loss:

TRADE SIGNAL: CHICAGO WTI CRUDE OIL FUTURS – SELL: 100, TARGET: 95, AND STOP-LOSS: 104

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