As the saying in markets goes, if something can’t go up on good news.. Well, that seems to be the case for oil as it not only erased the opening gap higher yesterday, but is now being pressured back towards the $70 mark today.
WTI crude oil daily chart
It goes to show that while OPEC+ may want higher oil prices, it seems that traders are not convinced by their plans outlined here over the weekend.
Adding to that, the continued worries surrounding China and the fact that major central banks are continuing to tighten financial conditions further (thus, reducing odds of a soft landing), it makes it tough to be overly bullish on the demand outlook for now.
I mean, the technical picture in itself also isn’t that encouraging, let’s be honest.
The failure to even test the 100-day moving average (red line) on the jump higher yesterday continues to reaffirm that sellers are in control now. However, they will need to do more to try and break below the 200-week moving average – which is the key line in the sand helping to prevent oil prices from a further breakdown over the past few months:
WTI crude oil weekly chart