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
Ethereum Drops Below $2,000 After Plunging Over 20% in a Month as Odds of $1,500 Retest SurgeEthereum Plunges Over 20% in a Month, Risking a Retest of $1,500 After Losing the $2,000 Defense Line.On November 13, Ethereum (ETH) plunged more than 5%, officially falling below the key
Author  TradingKey
14 hours ago
Ethereum Plunges Over 20% in a Month, Risking a Retest of $1,500 After Losing the $2,000 Defense Line.On November 13, Ethereum (ETH) plunged more than 5%, officially falling below the key
placeholder
Gold Price Forecast: Gold Tumbles Below $3,900 as Trump Says No Need for Iran Deal; Can October PPI Spur a Rebound? As of the Asian session on Friday (November 13), gold prices (XAUUSD) rebounded intraday following Thursday's sharp decline, trading near $3,910. Previously, gold tumbled 2.76% on Thursda
Author  TradingKey
16 hours ago
As of the Asian session on Friday (November 13), gold prices (XAUUSD) rebounded intraday following Thursday's sharp decline, trading near $3,910. Previously, gold tumbled 2.76% on Thursda
placeholder
Brent rose 3.3% and US crude stocks built 4.66 million barrels in the same weekBrent January settled at 95.82, up 3.3%, and WTI at 88.74, up 2.55%, after the US signalled it would not pursue a deal with Iran and attacks on Gulf shipping continued. In the same week, EIA data showed US crude inventories rising 4.657 million barrels against expectations of a 1.1 million draw, with gasoline up another 1.799 million. OPEC output also rebounded 1.96 million barrels a day to 27.16 million in October, led by Saudi Arabia at 10.56 million. This piece separates the geopolitical premium from the physical balance and lays out where each side of the trade is anchored.
Author  Irene Q.
20 hours ago
Brent January settled at 95.82, up 3.3%, and WTI at 88.74, up 2.55%, after the US signalled it would not pursue a deal with Iran and attacks on Gulf shipping continued. In the same week, EIA data showed US crude inventories rising 4.657 million barrels against expectations of a 1.1 million draw, with gasoline up another 1.799 million. OPEC output also rebounded 1.96 million barrels a day to 27.16 million in October, led by Saudi Arabia at 10.56 million. This piece separates the geopolitical premium from the physical balance and lays out where each side of the trade is anchored.
placeholder
Gold hit a one-year low while central banks bought 321 tonnes — the sellers were never the ones you thinkSpot gold closed at 3,876 on Thursday, down 2.8% and its lowest close in more than a year, with an intraday low near 3,852. The dollar is at a 19-month high of 103.21 and the 10-year yield is at 5.10%, so the price move is easy to explain. What is harder to explain is who sold: central banks bought 321 tonnes in Q3, the PBoC added for a 24th straight month, ETF holdings are near a record 4,256 tonnes, and roughly 95% of the futures selling came from non-reportable and sovereign-type accounts rather than hedge funds. This piece separates the two books that have to balance.
Author  Irene Q.
20 hours ago
Spot gold closed at 3,876 on Thursday, down 2.8% and its lowest close in more than a year, with an intraday low near 3,852. The dollar is at a 19-month high of 103.21 and the 10-year yield is at 5.10%, so the price move is easy to explain. What is harder to explain is who sold: central banks bought 321 tonnes in Q3, the PBoC added for a 24th straight month, ETF holdings are near a record 4,256 tonnes, and roughly 95% of the futures selling came from non-reportable and sovereign-type accounts rather than hedge funds. This piece separates the two books that have to balance.
placeholder
Today’s Market Recap: Nvidia Drops Over 4% After Jensen Huang Resigns, AMD and Broadcom Both Rise Over 5% On November 12, the three major U.S. stock indices closed slightly lower. Nvidia announced that Jensen Huang had stepped down immediately as CEO and director, draggi
Author  TradingKey
21 hours ago
On November 12, the three major U.S. stock indices closed slightly lower. Nvidia announced that Jensen Huang had stepped down immediately as CEO and director, draggi
goTop
quote