CRUDE OIL PRICE OUTLOOK:
- Crude oil costs struggled to carry positive factors amid viral considerations and weaker US knowledge
- A brand new wave of Covid-19 outbreaks within the Asia-Pacific area provides uncertainty to the demand outlook
- WTI faces a key resistance degree at $ 66.5 – the 200% Fibonacci extension
Crude oil costs had been muted in the course of the Asia-Pacific mid-day session after surging 2.6% on Friday. Traders are involved a few new wave of Covid-19 outbreaks within the Asia-Pacific area, which can overshadow a brighter vitality demand outlook within the US, Europe and China. Viral resurgence could decelerate the tempo of financial restoration within the area as many Asian international locations have made comparatively sluggish progress on vaccination.
Taiwan and Singapore, which have dealt with the pandemic comparatively effectively in 2020, reported surging Covid infections in the neighborhood. Each economies have entered partial lockdowns, leading to panic promoting of their inventory markets. Mutant viral strains present in India gave the impression to be extra contagious and deadly than the earlier ones, rendering a fragile financial restoration susceptible to backsliding. China has additionally tightened border controls and lengthened the quarantine interval for inbound vacationers within the wake of international outbreaks.
India and Japan, the world’s third- and fourth-largest oil importers respectively, are nonetheless struggling to comprise the unfold of the virus domestically. The difficult scenario could proceed to weigh on the vitality demand outlook within the area.
Now the important thing query is whether or not the mutant viral strains will unfold to different components of the world and the way a lot influence they may have. Sporadic circumstances confirmed that even individuals who have been absolutely vaccinated can nonetheless get contaminated by Covid-19.
On the intense facet, the arrival of summer time driving season within the US and Europe, alongside a robust financial restoration in China, could lend assist to grease costs. US crude inventories have been falling previously few weeks, underscoring robust demand. The restart of the Colonia Pipeline over the weekend might ease gasoline shortages alongside the East Coast and buoy consumption.
New confirmed Covid-19 circumstances in Taiwan – Previous 30 Days
Wanting forward, merchants are eyeing Thursday’s FOMC assembly minutes and Friday’s US Markit Manufacturing PMI knowledge for clues concerning the Fed’s tackle inflation and the well being of the US financial system. Wednesday’s API stock knowledge will even be intently watched.
Technically, WTI seems to be hitting a key resistance at round 66.5 – the 200% Fibonacci extension degree. WTI tried a couple of makes an attempt to breach this degree however didn’t succeed, suggesting that robust promoting strain could also be persisting at this degree. Costs stay in an “Ascending Channel” shaped because the finish of March, exhibiting that the general development stays bullish-biased.
The MACD indicator is flattening and will kind a bearish crossover if costs drop, pointing to weakening upward momentum.
WTI Crude Oil Worth – Each day Chart
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Feedback part beneath or @margaretyjy on Twitter