- WTI begins trading week with mild losses, down for the third consecutive day.
- Saudi Arabia, Iran flash mixed signals for Oil traders.
- Fears of global economic slowdown jostle with OPEC+ output cut to challenge energy traders.
- Softer US Dollar put a floor under the Oil price, Fed, US inflaion and China data are the key for fresh impulse.
WTI crude oil drops to $70.00 as the key week comprising multiple central bank events and the US inflation data begins. In doing so, the black gold fails to justify hawkish signals from Saudi Arabia and hopes of the Federal Reserve’s (Fed) no rate hike, as well as the softer US Dollar, amid expectations of the US-Iran trade deal and fears of economic slowdown.
The latest headlines from Saudi Arabia and Iran have been mixed for the Oil traders who are already struggling with the demand-supply matrix.
“The latest OPEC+ agreement involved comprehensive reform, but that the alliance was also working against ‘uncertainties and sentiment’ within the market,” said Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman on Sunday, reported Reuters.
On the other hand, Iran's supreme leader Ayatollah Ali Khamenei said on Sunday, per Reuters, “A deal with the West over Tehran's nuclear work was possible if the country's nuclear infrastructure remained intact, amid a stalemate between Tehran and Washington to revive a 2015 nuclear pact.”
It should be noted that speculation about the US-Iran trade deal triggered a slump in the Oil price the previous week before the official sources ruled out the basis and allowed the black gold to lick its wounds.
Elsewhere, fears of slower economic transition on a broader level join the fears of the US-China tension and higher yields to also prod the Oil buyers. On the same line could be the increasing odds of the US Federal Reserve’s (Fed) no rate hike in June, backed by downbeat US data, which in turn weigh on the US Dollar. Furthermore, mixed economics from China and expectations of a slower transition to growth also exert downside pressure on the WTI price.
Moving on, a slew of economics hang to entertain the Oil traders but major attention will be given to Tuesday’s US inflation and Wednesday’s Federal Open Market Committee (FOMC) monetary policy decision for clear directions. Should the US policymakers manage to defend hawks, the black gold may have more reasons to decline.
Technical analysis
Oil price grinds within an eight-day-old symmetrical triangle, currently between $69.50 and $73.00. That said, the quote’s sustained trading below the 200-bar Exponential Moving Average (EMA) on the four-hour chart keeps the Oil bears hopeful.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats from post-NFP highs
EUR/USD jumped towards 1.0900 after a disappointing US Nonfarm Payrolls report but retreated after the dust settled. The country added just 12,000 new jobs in the month, much worse than the 113,000 anticipated.
GBP/USD trims losses and regain some poise on USD weakness
GBP/USD advanced towards the current 1.2950 region after closing deep in the red on Thursday. A tepid US employment report pushed investors away from the US Dollar, helping the battered Pound.
Gold ticks higher after US NFP data
Gold extends its early recovery, holding above the $2,750 mark after a tepid US Nonfarm Payrolls report. The uncertainties surrounding the US presidential election and the ongoing geopolitical tensions in the Middle East provide some support to the precious metal.
Bitcoin Weekly Forecast: Run toward fresh all-time high hinges on US presidential election results
Bitcoin could experience a price pullback in the next few days ahead of the US presidential election, analysts say, an event that will be key to determining whether and how the crypto class will be regulated in the years to come.
Bank of Japan holds rates steady amid signs of modest GDP growth
Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.