. Oil prices dip as weak demand weighs - 22 March 2023

Oil prices dip as weak demand weighs – 22 March 2023

Oil prices dip as weak demand weighs – 22 March 2023

22 Mar 2023

Fears about demand cause oil to decline as the market anticipates a Fed decision.

FUNDAMENTAL OVERVIEW

  • Oil prices edged lower on Wednesday following fresh indications of weak demand, and as the market awaited a crucial interest rate decision by the U.S. Federal Reserve.
  • Brent crude futures, which have risen by almost 3% this week, were down 30 cents, or 0.40%, at $75.02 a barrel at 1026 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 29 cents, or 0.42%, at $69.38.
  • Data from the American Petroleum Institute on Tuesday called demand into question after it showed an unexpected rise in U.S. crude inventories last week, sources said, defying analyst estimates of a decline.
  • Official data from the Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due at 10:30 a.m. (1430 GMT) on Wednesday.
  • Further price weakness followed an unexpected rise in UK inflation in February, raising fears of further interest rate hikes a day before the Bank of England announces its latest interest rate decision.
  • The market will be seeking direction from the U.S. Fed’s Federal Open Market Committee (FOMC), which announces its decision on interest rates at 1800 GMT.
  • The expected rate hike of 25 basis points is a turnaround from the steep 50 basis point rate rise anticipated before the recent banking turmoil, triggered by the collapse of two regional banks.
  • “It would be a big shock if the Fed reverted back to larger rate hikes now considering everything that’s happened this past couple of weeks,” said Craig Eram, senior market analyst at OANDA.
  • Brent prices hit their lowest last week since 2021 on concern that the rout in bank shares could trigger a global recession and cut fuel demand.
  • An emergency rescue of Credit Suisse over the weekend helped revive oil prices.

BRENT CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

Brent Crude Oil is currently trading in the down channel.

Brent Crude Oil is currently trading below 20&50 SMA.

RSI is in the selling zone which suggests bearishness and Stochastic is suggesting no trend.

Brent Crude oil resistance is at 75.60 & its immediate support level is 73.59

HOW TO TRADE BRENT CRUDE OIL

Brent Crude Oil is currently encountering resistance at a particular level and is trading in a downward channel. We can see additional negatives if it rejects its resistance level.

TRADE SUGGESTION- SELL AT 75.17, TAKE PROFIT AT 74.04, SL AT 75.90