WTI tumbles below the 200-DMA on recession worries, Iran’s nuclear deal progress

US crude oil benchmark, also known as WTI (West Texas Intermediate) drops for the second consecutive day on disappointing US and China data, reigniting recession fears worldwide, with traders moving toward safe-haven assets. On Monday, WTI shed 4.37% from its price, closing below its opening price at $87.85. However, as the Asian Pacific session begins, WTI is trading at $88.18 PB, edging up by 0.57%.

In the early Monday session, China’s economic docket reported Industrial Production and Retail Sales, each at 3.8% YoY and 2.7% YoY, respectively, missing forecasts. That said, the People’s Bank of China (PBoC) surprised the markets, slashing its 1-year MLF to 2.75%, a consequence of the previously mentioned.

During the New York session, the NY Fed Empire State Manufacturing Index for August tumbled to -31.3, lower than estimates, as shipments and new orders plunged.

Meanwhile, the latest developments in the Iran nuclear deal weighed on lower crude oil prices. Sources cited by the semi-official Iranian Students’ New Agency said that Tehran’s stance had been sent to the EU top commissioner Josep Borrell.

Iran Foreign Minister Hossein Amirabdollahian commented that an agreement with Washington could be reached to restore the accord “if the US shows a realistic approach and flexibility,” as reported by Bloomberg. Amirabdollahian said that they’re ready to enter the phase of announcing the deal “if our latest points are met” and said that if the US is trying to “gain concession, then we’ll have to talk and negotiate more.”

If Iran’s nuclear deal is approved, oil from Iran would be seen as a relief from high energy prices, particularly consumers, which had been dealing with skyrocketing petrol and gasoline prices, with countries like the US battling inflation at 4-decade highs.

WTI Key Technical Levels