Russia is consolidating control over Iraqi oil production while its foothold in Kurdistan dwindles. India recently made its inaugural crude oil payment in rupees, bypassing the USD. However, U.S. financial media seem laser-focused on China's economic challenges. Does the global oil price hinge heavily on China's economic performance, or is this merely a transient downturn, making it a lucrative time for buyers? The data indicates a robust bullish upswing in oil prices for the past couple of months, but current trends hint at a potential slowdown. If prices dip below the $80.30 mark, representing the 23.6% point of the daily Fibonacci retracement, the subsequent support level might hover around $77.80. This paints a challenging picture for OPEC and other oil-exporting nations this week.
U.S. media outlets have been critical of China's economic trajectory lately, which many argue is causing the 4.65% decline from $84.92 to $80.98 over the previous six days. Yet, traders might want to tread lightly on this presumption. Despite many accredited news outlets highlighting the link to China, it might be prudent for traders to consider other potential factors driving the decline.
Competition intensifies as India seeks affordable Russian oil, compelling China to augment its oil imports from Iran by an additional 1.5 million barrels daily. This surge is anticipated to peak next month, marking a decade high. Contrary to popular belief, China's demand for oil is climbing, not declining. Typically, heightened demand spurs a bullish trend in asset prices. The impact of a single nation's economic health on oil prices, especially when its demand is on the upswing, isn't being thoroughly discussed currently.
We advise traders to diversify their news intake on oil updates using the Exness Trade app, ensuring they also factor in insights from European and Asian outlets in addition to U.S. sources. Here's a snapshot of what The Wall Street Journal is currently broadcasting about oil:
The stability of crude oil prices persists after a recent drop, as concerns surrounding China's demand cast a shadow over supply scarcity apprehensions. Both Brent crude and WTI stand unchanged, priced at $84.92 and $80.98 per barrel respectively. ANZ suggests, "The apprehension that China's wavering economy might dampen demand counterbalances the constrained supply in the oil market." A general "risk-off" sentiment prevails, as Brent falls beneath the $85 mark, ANZ analysts note. This trend persists despite the dwindling oil stocks in Cushing, a primary oil nexus. Moreover, "Asian refineries are swiftly acquiring all accessible U.S. oil consignments, with Rongsheng Petrochemical Co securing a substantial quantity from the spot market just last week."
