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Traders remain cautious about buying crude oil due to the significant drop in prices, indicating concerns about global growth.
On Monday, West Texas Intermediate (WTI) crude oil prices saw a slight retreat, reflecting the broader energy market’s weakness. Global recession fears are causing traders to sell crude oil, and recent production cuts by OPEC have only exacerbated the issue, creating a significant gap in the market.
The WTI crude oil market has been experiencing resistance from the 50-day Exponential Moving Average (EMA) on the way back up. There is a possibility that prices may fall even lower if they break down below last week’s lows, potentially leading to a move down to the $70 level. On the other hand, a break above the 50-day EMA could see prices move toward $79, where resistance is expected.
Similarly, Brent crude oil markets have experienced a decline due to the choppy, noisy behavior of the market. While the 50-day EMA may offer resistance, a break above it could potentially lead to a move toward the 200-day EMA, which is a significant technical barrier. However, if Brent were to break down below the lows of the week, it could result in prices dropping to the $75 level, a psychologically significant figure that could offer some support.
- Traders remain cautious about buying crude oil due to the significant drop in prices, indicating concerns about global growth.
- Chinese numbers are also starting to slow down, with PMI dropping below 50 overnight, a very negative sign.
- These factors could further exacerbate the global recession fears and lead to further declines in oil prices.
The oil industry is facing a difficult time, with declining demand and oversupply driving prices down. However, there are some potential bright spots on the horizon. For instance, OPEC+ has signaled its intention to continue cutting production to support prices. Additionally, volatility around the world markets will continue to be an issue as well. Quite frankly, nothing is “stable” at the moment..
At the end of the day, the oil market is experiencing a lot of softness, and traders are wary of buying into it. There is a lot of uncertainty surrounding the global economy, and if the trend continues, it could result in further declines in crude oil prices. Traders should be vigilant and cautious while navigating the volatile market to avoid any losses, with an eye on position size and making sure that the stop loss orders you put are adhered to.
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