Oil prices continued to face challenges as recession fears and global demand concerns weighed on investor sentiment. The looming prospect of a recession is exacerbating worries about demand, putting downward pressure on oil prices.
Although there was a brief attempt to push prices higher overnight, geopolitical tensions in the Middle East and China’s economic outlook remain key factors contributing to the bearish sentiment in the market.
Market participants are closely monitoring the situation in the Middle East, as any escalation in conflict could significantly impact oil supply and prices. Additionally, recent data showing a decline in Chinese oil imports is adding to the negative outlook for oil prices.
On top of these concerns, US stockpiles unexpectedly increased, further dampening market sentiment. Crude stocks rose by 176,000 barrels, contrary to analysts’ expectations of a decrease.
Later today, the Energy Information Administration (EIA) will release its weekly inventory data, providing more insights into US stockpiles. However, the overall outlook is unlikely to change significantly, as geopolitical risks remain the primary focus for investors.
From a technical analysis perspective, Brent oil has been on a downward trend since July, approaching the lower band of a channel that has been in play since March. The psychological level of $75.00 could be a crucial support level for oil prices.
While there is a possibility of a recovery, especially if oil manages to break above $78.500, any positive momentum could be hindered by new developments in geopolitical tensions or economic slowdown concerns.
Support Levels:
- 76.50
- 76.00
- 75.00 (psychological level)
Resistance Levels:
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