WTI DROPS AS ECONOMIC WORRIES OUTWEIGH SUPPLY CONCERNS
WTI Crude futures are currently trading at $52.04- lower by 0.80% as compared to the previous closing price.
Brent crude futures were trading at $61.68-lower by 0.52% as compared to the previous closing.
Crude prices fell today as signs of an economic slowdown amid trade tensions offset supply concerns caused by attacks on oil tankers in the Gulf of Oman last week.
U.S. Secretary of State said on Sunday that Washington will take all actions necessary to guarantee safe navigation in the Middle East.
Also, weighing on prices is the news, India imposed retaliatory tariffs on a number of U.S. goods starting from Sunday (16th June).
In addition, the IEA lowered its 2019 estimate for global oil demand growth for the second consecutive month on Friday (14th June) due to escalating trade tensions amid fears of a global recession. The agency slashed its oil demand growth forecast to 1.2 million bpd from 1.3 million bpd in the previous month.
According to market sources, seven straight weeks of selling has now cut the combined long in US crude oil and Brent Crude by 41% to 421,000 lots.
Meanwhile, Saudi energy minister Khalid al-Falih said earlier today that the OPEC was moving toward a consensus on extending a production cut agreement in July meeting.
The producer group OPEC+ has been cutting supply since the start of the year to tighten the market. The OPEC and its allies will meet on July 2-4 in Vienna, to discuss supply policy.
The U.S. energy services firm Baker Hughes said in its report on Friday that the U.S. energy firms last week decreased the number of rigs looking for new oil by 1 to 788 for the week ended 14th June.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API is scheduled to report U.S. crude supplies for the week ended 14th June on Tuesday. Previously, the API reported that U.S. crude supplies rose by 4.850 million barrels for the week ended June 7. The EIA will report US crude inventories for the week ended June 14 on Wednesday. Previously, the EIA reported that U.S. crude inventories rose by 2.206 million barrels for the week ended June 7.
On the technical front, the RSI is currently at 33.93% and suggests that the market can move in the downward direction. The current price is below the MA5. The %K has crossed the %D from below to the upside at around 17% and suggests that the market can move in the upward direction.
Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Sell At 52.16 Take Profit At 51.56 Stop Loss At 52.46