CRUDE OIL OUTLOOK:
- WTI crude oil prices set to a maximum weekly decline of four weeks
- Spread of Delta variants, OPEC + deadlock, which puts pressure on prices
- In US retail, consumer confidence reports are now in the spotlight
Crude oil prices saw strong sales pressure this week, and the pace of WTI contact is the biggest drop in five days since mid-March. Concerns about the slowdown in global growth and the headwind of energy prices associated with the spread of the infamous Delta variant of the Covid-19 virus have been compounded by persistent output levels between Saudi Arabia and the UAE.
The two power plant manufacturers are trying to agree on an appropriate size for the OPEC + group of top exporters to increase production – a forum that includes both the OPEC cartel and like-minded external members (especially Russia). Traders are seemingly worried that continuing disagreements could see the consortium break up, bringing free production to everyone, flooding the market and drowning in prices.
US RETAIL, CONSUMER INSURANCE Focus
In the following, the focus will be on both US retail data and the University of Michigan Consumer Confidence Survey. The number of receipts will fall by 0.4 percent in June, while the July report will strengthen for the second month in a row. Leading PMI survey data suggest that retail sales slowed somewhat last month, although overall growth remained subdued.
The effect of reflection is closely monitored. Labor shortages have pushed up realized and expected wage costs, which may be beneficial for consumption in the near future. Demand for the network during the reopening of Covid-related locks is another leeward wind. However, soaring prices can also depress purchasing power, worsen consumer prospects and reduce spending growth.
All in all, the emergence of resilience in the most important sector of the world’s largest economy could boost the outlook for oil demand and raise higher prices. Alternatively, sellers may be overweight if the data suggest that consumer oversupply is declining as growth rates begin to return to normal after the Covid slumps increase and the cost burden expands.
TECHNICAL ANALYSIS OF CRUDE OIL
Prices test low support at 70.76 after a thin evening star candlestick pattern has seemingly marked a peak below the $ 77 / bbl figure. The daily approved distribution may specify an area of 66.76-67.98 for retesting. Immediate resistance is in the range of 75.52 to 76.98, and its proximity seems to be a prerequisite for neutralizing short-term selling pressure.
The crude oil price graph is created using TradingView
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– Written by Ilya Spivak, DailyFX APAC Chief Strategist
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