Oil Slips On Growing Concerns Over Global Downturn
Fiona Cincotta July 4, 2019 11:34 AM
Oil slipped lower on Thursday following a smaller than forecast draw down and on rising concerns over the health of the global economy. Following an almost 2% rally in the previous session, investors were questioning their earlier bullishness.
EIA reported weekly declines of 1.1 million in crude stocks, versus the 3 million draw down forecast and the 5 million barrels reported the previous day by the API.
US refineries consumed less oil crude than the previous week and 2% less than a year ago, despite summer being a traditionally strong season for demand. The most obvious reason for this is slowing demand in the US, which would tie into the weakening US economy story, particularly after data showed that US factory order slumped -0.7% in May.
Investors will now look towards the non-farm payroll data tomorrow for further clues over the health of the US economy. A weak reading could see the price of oil dip as it would further fuel concerns over future demand expectation.
Levels to watch:
We would look for a break above $57.50 to open the door to resistance at 58.30/40. Beyond this $59.45/50 would come into play. On the downside, the bears would need to break down support at $56.50 to progress to $56.00 and down back towards $53.40.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.