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WTI struggles around $105.50 amid fears surrounding Russia, global recession

  • WTI consolidates the biggest daily jump in six weeks, pressured around intraday low.
  • German official hints at G7 eyeing to cap Russian oil prices, US confident of ‘strong’ NATO strategy on China.
  • Fears of global recession, higher rates also exert downside pressure on the commodity prices.
  • US Durable Goods Orders, central bankers’ debate and Friday’s OPEC meeting will be important for fresh impulse.

WTI crude oil prices remain pressured around $105.50, despite rising the most in 1.5 months the previous day, as fears surrounding demand slowdown weigh on the energy benchmark. It’s worth noting, however, that geopolitical headlines appear to limit the black gold’s downside.

That said, the comments from a German Official suggesting the Group of Seven (G7) leaders’ preparedness for capping Russia's oil prices seem to recently weigh on the WTI. “Leaders of the Group of Seven rich democracies are having "very constructive" discussions on a possible cap on Russian oil imports, a German government official said on Saturday shortly before the start of the annual three-day G7 summit,” said Reuters.

Elsewhere, the US anticipates strong comments on China from the North Atlantic Treaty Organization (NATO), which in turn adds bearish bias to the oil prices due to Beijing’s position among the world’s top oil consumers. “The US is confident that NATO's new strategy document will include "strong" language on China, a White House official said on Sunday, adding that negotiations on how to refer to Beijing were still underway,” per the news from Reuters.

On a different page, International Monetary Fund (IMF) Managing Director Kristalina Georgieva crossed wires during the weekend while saying, “Further negative shocks would inevitably make US economic situation ‘more difficult’.” The IMF revised down US 2022 GDP forecasts to 2.9% versus 3.7% predicted earlier. The same helps to recall the oil sellers even after exerting downside pressure on the US dollar.

It’s worth noting that the US housing numbers and a record low sentiment figures managed to favor the market’s mood and helped Antipodeans during Friday. That said, the US New Home Sales for May, by 10.7% versus April’s revised figures of -12.0%, joined the record low print of the final reading of the University of Michigan's Consumer Sentiment Index for June, to 50.0 from 50.2 initial estimates, also drowned the US dollar on Friday.

Moving on, this week’s verdict from the Organization of the Petroleum Exporting Countries (OPEC) will be important for the oil traders amid speculations of more output. Ahead of that, today’s US Durable Goods Orders for May, expected 0.1% versus 0.5% prior, as well as Wednesday’s debate of the US and the UK and the European central bankers at the ECB Forum on Central Banking will be crucial.

Technical analysis

WTI jostles with a two-week-old resistance line, around $105.85 by the press time, as sellers trying to cheer a downside break of the previous key support line from early April, near $107.70 at the latest.

Additional important levels

Overview
Today last price105.37
Today Daily Change-0.79
Today Daily Change %-0.74%
Today daily open106.16
 
Trends
Daily SMA20113.78
Daily SMA50109.09
Daily SMA100104.55
Daily SMA20091.2
 
Levels
Previous Daily High107.62
Previous Daily Low102.79
Previous Weekly High110.82
Previous Weekly Low101.17
Previous Monthly High118.66
Previous Monthly Low97.21
Daily Fibonacci 38.2%105.77
Daily Fibonacci 61.8%104.63
Daily Pivot Point S1103.43
Daily Pivot Point S2100.69
Daily Pivot Point S398.6
Daily Pivot Point R1108.25
Daily Pivot Point R2110.35
Daily Pivot Point R3113.08

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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