WTI stays defensive near $76.00 as central banks renew recession fears, PMIs eyed
|- WTI remains pressured after snapping four-day uptrend the previous day.
- Fears of higher rates, more inflation amplified economic slowdown concerns.
- US Dollar cheered risk aversion and weighed on the WTI crude oil prices.
- December’s preliminary PMIs from the key economies eyed for fresh impulse.
WTI crude oil licks its wounds near $76.20 during early Friday, following a U-turn from the weekly top to welcome the bears. In doing so, the black gold traders await the first readings of the key activity numbers from top-notch economies amid fears of recession.
That said, the energy benchmark dropped the most in over a week by printing the first daily loss in five the previous day as global central banks announced rate hikes. Adding to the oil market’s pessimism was the policymakers’ readiness to hold the rates high for a longer time, as well as fears of inflation. As a result, the resulting economic slowdown concerns underpinned the US Dollar’s safe-haven demand and weighed on the Oil.
Additionally, downbeat China data offered extra strength to the black gold sellers due to Beijing’s status as one of the world’s biggest commodity users. China’s Retail Sales slumped to -5.9% in November versus -3.6% expected and -0.5% prior while Industrial Production came in at 2.2% compared to 3.3% market forecasts and 5.0% previous readings.
Furthermore, headlines from Canada also weighed on the oil prices as Reuters mentioned, “Canada's TC Energy Corporation said it was resuming operations in a section of its Keystone pipeline, a week after a leak of more than 14,000 barrels of oil in Kansas triggered a shutdown.”
As a result, the oil bears are well-set to retake controls but await the preliminary readings of the December month PMIs for the UK, Europe and the US for clear directions.
Technical analysis
A clear U-turn from the six-week-old descending resistance line, around $77.30 by the press time, favors WTI crude oil sellers to aim for November’s low near $73.65.
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