WTI drops amid China’s property crisis, ahead of FOMC’s meeting

Source Fxstreet
  • WTI oil drops over 1.50%, affected by China's property sector woes and a robust US Dollar.
  • Oil prices falter despite geopolitical tensions, pressured by global economic concerns and central bank policies.
  • Market awaits API and EIA reports for insights on US crude and distillate stocks amid economic uncertainty.

West Texas Intermediate (WTI) drops sharply more than 1.50% on Monday, after failing to crack a key technical resistance level, along with demand woes sponsored by China’s property crisis. Despite rising tensions in the Middle East, traders are bracing for the US Federal Reserve (Fed) decision to keep the US Dollar strong. At the time of writing, WTI exchanges hands at $76.90.

Crude Oil struggles to break key resistance, and plunges on risk sentiment

The real estate crisis in China might be about to get worse as a Hong Kong court ordered the liquidation of property giant China Evergrande Group. Sources cited by Reuters said, “The situation in China is the biggest headwind to the whole market; that is why the market keeps backing off from the war risk premium.”

Oil prices failed to gain traction following an attack to a Russian oil facility on Monday on the Slavneft-YANOS refinery in the city of Yaroslavl.

In the meantime, the restrictiveness of global central banks keeps Oil prices slightly depressed as the Federal Reserve (Fed) and the Bank of England (BoE) take center stage during the week. Both central banks are expected to keep rates unchanged, though the former is underpinning the Greenback (USD).

The US Dollar Index (DXY), which tracks the performance of six currencies against the buck, is up 0.14%, at 103.61, a headwind for US Dollar denominated assets.

All in all, Oil traders are looking forward to the American Petroleum Institute (API) stockpiles report in the US on Tuesday, ahead of the US Energy Information Administration (EIA) on Wednesday.

According to a Reuters poll, US crude Oil and distillates are expected to have reduced last week, while gasoline inventoried were seen rising.

WTI Price Analysis: Technical outlook

With WTI’s failing to crack the 100-day moving average (DMA) at $79.37, sellers piled in a comeback as Oil prices were dragged below the 200-DMA at $77.44, exacerbating the drop below $77.00 per barrel. A daily close below the latter will expose the $76.00 figure, followed by the 50-DMA at $73.54. Further downside is seen at $73.00. Conversely if buyers lift the price above $77.00, a test fo the 200-DMA is on the cards.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: XAU/USD holds positive ground above $2,020 ahead of US CPI dataGold price (XAU/USD) drifted higher during the early Asian trading hours on Thursday.
Author  FXStreet
Jan 11, 2024
Gold price (XAU/USD) drifted higher during the early Asian trading hours on Thursday.
placeholder
Gold holds steady below $4,150 amid elevated US yields Gold price (XAU/USD) trades on a flat note near $4,140 during the early Asian session on Tuesday. Pressure from a stronger US Dollar (USD) and elevated US Treasury yields was offset by reduced expectations of a Federal Reserve (Fed) rate hike this month.
Author  FXStreet
Oct 06, Tue
Gold price (XAU/USD) trades on a flat note near $4,140 during the early Asian session on Tuesday. Pressure from a stronger US Dollar (USD) and elevated US Treasury yields was offset by reduced expectations of a Federal Reserve (Fed) rate hike this month.
placeholder
WTI rises to near $89.50 as Middle East supply threats offset Persian Gulf recoveryWest Texas Intermediate (WTI) oil price extends its gains for the second successive day, trading around $89.50 per barrel during the Asian hours on Wednesday. Crude oil climbed as persistent risks to Middle East energy flows overshadowed signs of rising supply from the region.
Author  FXStreet
Yesterday 01: 26
West Texas Intermediate (WTI) oil price extends its gains for the second successive day, trading around $89.50 per barrel during the Asian hours on Wednesday. Crude oil climbed as persistent risks to Middle East energy flows overshadowed signs of rising supply from the region.
placeholder
Gold Price Forecast: XAU/USD retraces gains and nears two-month lows at $4,104Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and resumes its broader bearish trend, with the US Dollar (USD) appreciating across the board, as investors brace for the release of the minutes of the latest Federal Reserve (Fed) meeting.
Author  FXStreet
Yesterday 10: 13
Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and resumes its broader bearish trend, with the US Dollar (USD) appreciating across the board, as investors brace for the release of the minutes of the latest Federal Reserve (Fed) meeting.
placeholder
Gold falls to a two-month low as real yields bite — can $4,000 hold?Gold hit a two-month low on 7 October, with spot touching roughly $4,090 and COMEX December futures closing at $4,140.70, even as the New York Fed's one-year inflation expectation rose to 3.9% — its highest since May 2023. The paradox resolves through real yields: the 30-year Treasury yield reached 5.732% intraday, its highest since 2002. Here are the levels, the institutional split, and the scenarios into tonight's jobless claims and 30-year auction.
Author  Irene Q.
7 hours ago
Gold hit a two-month low on 7 October, with spot touching roughly $4,090 and COMEX December futures closing at $4,140.70, even as the New York Fed's one-year inflation expectation rose to 3.9% — its highest since May 2023. The paradox resolves through real yields: the 30-year Treasury yield reached 5.732% intraday, its highest since 2002. Here are the levels, the institutional split, and the scenarios into tonight's jobless claims and 30-year auction.
goTop
quote