Crude oil - consolidation or reversal?
Crude oil came under early selling pressure yesterday morning, but managed to make back some of its losses as the session progressed. Despite this, crude ended down on the day, and has fallen again today. Chart-wise, one interpretation is that both WTI and Brent continue to consolidate just below April’s multi-month highs. Yet the downside pressure has picked up this week, as is shown by the MACD above. And without a reversal in price, selling pressure may intensify.
Investors continue to express concerns over the prospect of increased hostilities and further direct military action between Israel and Iran. But this has not been reflected in the price of oil. Instead, worries over the global demand outlook have resurfaced, thanks to the weakness of several recent economic data releases from China. This has been compounded by a run of hotter-than-expected US inflation numbers this year. These have forced investors to accept that interest rates are likely to stay at current levels for considerably longer than previously expected.
Investors continue to express concerns over the prospect of increased hostilities and further direct military action between Israel and Iran. But this has not been reflected in the price of oil. Instead, worries over the global demand outlook have resurfaced, thanks to the weakness of several recent economic data releases from China. This has been compounded by a run of hotter-than-expected US inflation numbers this year. These have forced investors to accept that interest rates are likely to stay at current levels for considerably longer than previously expected.
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