Despite positive China statistics, oil declines due to economic concerns.
- Tuesday saw a second day of oil declines as positive economic data from China failed to divert attention from potential increases in U.S. interest rates and broader concerns about the future for growth.
- The Kurdistan Regional Government (KRG) and the federal government of Iraq took action to resume northern oil exports from the Turkish port of Ceyhan after they were suspended last month, which put pressure on crude prices.
- By 0908 GMT, Brent crude had lost its early gains and dropped 28 cents, or 0.3%, to $84.48 per barrel. To $80.53, U.S. West Texas Intermediate dropped 30 cents (0.4%).
- The outlook for oil prices was discussed by Craig Erlam of brokerage OANDA. “The next step may depend on global growth and whether the economy can weather the recent storm, particularly in the U.S., where tighter credit could significantly weigh on growth for the rest of the year,” he said.
- Data indicating that China’s GDP expanded by a faster-than-anticipated 4.5% in the first quarter and that oil refinery throughput increased to record levels in March helped oil find support earlier in the session.
- According to Stephen Brennock of oil broker PVM, “As things stand, China is operating normally, much to the relief of those betting on higher oil prices.”
- The most recent inventory snapshot for the United States will be in the spotlight on Tuesday. Analysts predict a 2.5-million-barrel drop in U.S. crude stocks as well as drops in petrol and distillates.
BRENT CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Brent Crude Oil is currently trading in the up channel.
Brent Crude Oil currently trading above 20&50 SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting a downtrend.
Brent Crude Oil resistance is at 85.22 & its immediate support level is 84.24
HOW TO TRADE BRENT CRUDE OIL
The price of Brent crude oil was going up in a channel. However, it was rejected from the resistance zone, and the price started moving downward. Currently, crude oil is trading at an important support level; if the level is broken, we might see a further decline to the negative.