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WTI extends losses near $86.70, Chinese crude oil output edges up

  • Crude oil prices weaken despite geopolitical tension in the Middle-East.
  • Israel hit missiles at Damascus and Aleppo international airports in Syria.
  • Chinese crude oil output edged up 0.3% (YoY) to 16.87 million tonnes.

Western Texas Intermediate (WTI) oil price extends losses for the second session, trading lower around $86.70 per barrel during the Asian session on Monday. However, Crude oil prices received upward support due to the concerns that the Israel-Gaza conflict may escalate across the Middle East, potentially disrupting supplies from one of the world's leading production regions.

Concerns among investors are rising due to the potential spillover of geopolitical tensions in the Gaza Strip, which poses a threat to the stability of the region near the Strait of Hormuz. This strategic waterway is a crucial chokepoint for global oil supply, with about a fifth of the world's oil passing through its waters.

Moreover, the situation in the region remains tense as Israel targeted missiles at Damascus and Aleppo international airports in Syria on Sunday. The strikes resulted in both airports being rendered out of service. However, there is currently no indication of a ground war in Gaza.

China's crude oil output has seen a 1.9% year-on-year increase in the first three quarters of 2023, reaching 156.72 million tonnes, according to data from the National Bureau of Statistics (NBS). In the most recent month, crude oil output edged up 0.3% (YoY) to 16.87 million tonnes.

Additionally, China's crude oil imports surged, with the country importing 424.27 million tonnes in the first nine months of 2023, reflecting a significant increase of 14.6% compared to the same period in 2022. These figures indicate ongoing dynamics in China's energy landscape and its role in the global oil market.

The US Dollar Index (DXY) trades higher around 106.30 at the time of writing, recovering the recent losses. The US Dollar receives upward support due to the positive momentum in US Treasury yields, with the 10-year US Treasury yield standing at 4.98%, up by 1.30% by the press time.

The Greenback seems to be finding potential support from robust US economic data released in the previous week. The recent job data reflects a strong economy, with Weekly Initial Jobless Claims reaching their lowest level since January, indicating a resilient job market. However, the housing market presents challenges as existing home sales have fallen to their lowest point since 2010.

Despite the positive economic data, mixed remarks from US Federal Reserve (Fed) officials regarding the interest rates trajectory could weigh on the US Dollar. Atlanta Fed President Raphael Bostic indicated that the Federal Reserve is unlikely to lower interest rates before the middle of next year, and Fed Philadelphia President Patrick Harker reiterated a preference for maintaining unchanged interest rates.

Additionally, Federal Reserve (Fed) Chairman Jerome Powell clarified in the previous week that the central bank is not planning an immediate rate hike, emphasizing the potential for further tightening of monetary policy in response to signs of growth.

Investors are likely to monitor the US S&P Global PMI on Tuesday and the Q3 Gross Domestic Product (GDP) on Thursday. These key indicators hold the potential to significantly impact market sentiment and provide valuable insights into the broader economic landscape of the United States.

WTI US OIL: technical levels to watch

Overview
Today last price86.75
Today Daily Change-1.37
Today Daily Change %-1.55
Today daily open88.12
 
Trends
Daily SMA2086.67
Daily SMA5085.38
Daily SMA10080.05
Daily SMA20077.88
 
Levels
Previous Daily High89.64
Previous Daily Low87.37
Previous Weekly High89.64
Previous Weekly Low84.39
Previous Monthly High93.98
Previous Monthly Low83.09
Daily Fibonacci 38.2%88.24
Daily Fibonacci 61.8%88.77
Daily Pivot Point S187.11
Daily Pivot Point S286.1
Daily Pivot Point S384.83
Daily Pivot Point R189.38
Daily Pivot Point R290.65
Daily Pivot Point R391.66

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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