Crude Oil Price Eyes China Slowdown, IMF Growth Outlook Update
Brent Oil and Chinese GDP:
- Chinese Q4 GDP the weakest in a decade.
- IMF Outlook will confirm fears of a global slowdown.
Crude Oil Price Rangebound But Headwinds Build
The Chinese economy grew by 6.6% in 2018, down from 6.8% in 2017, its slowest rate in 28 years official data showed today. In Q4 2018 China grew by 6.4% y/y, the slowest rate of expansion in a decade, adding to fears that global growth is slowing down. Ahead, the IMF will release their latest Global Growth Outlook at Davos today at 13:00 GMT and may warn further over growth prospects in 2019. In October the IMF downgraded its global growth outlook to 3.7% and warned about the negative effects that trade wars are having on global trade.
The daily chart shows Brent crude stuck in a short-term $60-$65/bbl. range which corresponds with the 50% and 38.2% Fibonacci retracement levels. Support is provided by the 20- and 50-day moving averages which are looking to cross-over and provide a mildly bullish impulse. The December 7 high around $63.80/bbl. is the first update target before the 50% Fibonacci level. The RSI indicator is showing oil at its highest level since October 9 and nearing overbought territory. Market moves may be limited with US markets closed in observance of the Martin Luther King Jr. holiday.