News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • RBA's Debelle - Economic recovery significantly exceeded the most optimistic expectations - But that is not the case for wages and inflation - Will not raise rates until actual inflation is sustainably within target band - Do not expect these conditions to be met until 2024
  • 💶 Retail Sales YoY (MAR) Actual: 12% Expected: 9.6% Previous: -1.5% https://www.dailyfx.com/economic-calendar#2021-05-06
  • Heads Up:💶 Retail Sales YoY (MAR) due at 09:00 GMT (15min) Expected: 9.6% Previous: -2.9% https://www.dailyfx.com/economic-calendar#2021-05-06
  • Heads Up:🇦🇺 RBA Debelle Speech due at 09:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-05-06
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/ffKynOknhM
  • 🇬🇧 Markit/CIPS UK Services PMI Final (APR) Actual: 61.0 Expected: 60.1 Previous: 56.3 https://www.dailyfx.com/economic-calendar#2021-05-06
  • 🇬🇧 Markit/CIPS Composite PMI Final (APR) Actual: 60.7 Expected: 60 Previous: 56.4 https://www.dailyfx.com/economic-calendar#2021-05-06
  • Heads Up:🇬🇧 Markit/CIPS UK Services PMI Final (APR) due at 08:30 GMT (15min) Expected: 60.1 Previous: 56.3 https://www.dailyfx.com/economic-calendar#2021-05-06
  • Heads Up:🇬🇧 Markit/CIPS Composite PMI Final (APR) due at 08:30 GMT (15min) Expected: 60 Previous: 56.4 https://www.dailyfx.com/economic-calendar#2021-05-06
  • 🇳🇴 Norges Bank Interest Rate Decision Actual: 0% Expected: 0% Previous: 0% https://www.dailyfx.com/economic-calendar#2021-05-06
Crude Oil Prices Weighed by Demand Concerns, Rising US Dollar

Crude Oil Prices Weighed by Demand Concerns, Rising US Dollar

Margaret Yang, CFA, Strategist

CRUDE OIL OUTLOOK:

  • WTI crude oil prices plummeted 4% as stocks fell, US Dollar rose
  • Demand outlook is dampened by plans for further lockdowns in the EU
  • Bollinger Band and “Death Cross” flag more downside risk

WTI crude oil prices (WTI) registered their largest single-day decline in two weeks, falling as much as 6% before pairing some losses and closing 4% lower. A resurgence of coronavirus cases and a potential lockdown in part of the EU is weighing energy demand outlook, overshadowing a fragile economic recovery. US Dollar’s strengthening put more pressure on commodity prices, with gold and silver falling alongside crude oil prices.

Meanwhile, a pending US fiscal stimulus package dwindled hopes for more spending in the near term. However, the approval of the spending bill will likely give energy prices a boost when it is eventually inked.

An online meeting held by OPEC+ members last Thursday didn’t reveal a solid production cut plan, but it raised hopes that the committee will closely monitor the outlook for demand and may deepen production cuts when necessary. Recently, IEA and OPEC have both trimmed their outlook for crude oil demand this year.

IG Client Sentiment indicates that sentiment is mixed among oil traders, with 60% of the position net long, while 40% are net short. As oil prices fell, traders trimmed some short positions while adding some long positions overnight. Compared to a week ago, however, traders are still building up short bets while cutting long positions.

Crude Oil Prices Weighed by Demand Concerns, Rising US Dollar

Volatility in crude oil prices has spiked, with the width of the Bollinger Band widening in the past two weeks (chart below). WTI is testing its 20-Day Simple Moving Average (SMA) line at US$ 39.6. A price reversal back below the middle Bollinger Band (also a 20-Day SMA) may flag more downward risk in the short term.

Technically,the WTI crude oil price failed to break its 50-Day SMA and reversed lower. Its 20-Day SMA has crossed below both the 50- and 100-Day SMA, potentially forming a “Death Cross”. The WTI may find an immediate support level at US$ 39.7 (20-Day SMA) and then a major support level at US$ 36.4 (50% Fibonacci retracement).

WTI Crude Oil PriceDaily Chart

Crude Oil Prices Weighed by Demand Concerns, Rising US Dollar

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES