Fundamental Overview
Crude oil has been on a downward trend ever since the softer than expected NFP report at the beginning of August triggered some growth concerns. That was then followed by the OPEC+ increase in oil production, although it was already expected.
The focus then switched to the easing in concerns on harsher US sanctions on Russia as expectations on a possible ceasefire have been building leading up to the Trump-Putin summit in Alaska tomorrow.
The focus on higher supply and lower demand has been weighing on the market despite the upcoming Fed rate cuts.
Although we don’t know how the summit is going to go, positive developments could mark the bottom on a “sell the fact” scenario with the focus then switching to the rate cuts which will be positive for demand.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that crude oil is now trading below the key 64.00 support zone. The sellers will likely continue to pile in around these levels with a defined risk above the support now turned resistance to position for a drop into the 55.00 handle next. The buyers, on the other hand, will want to see the price rising back above the 64.00 resistance to invalidate the bearish setup and position for a rally into the 72.00 resistance.
Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor downward trendline defining the bearish momentum. The sellers might split their orders to pile in both at the trendline and the 64.00 resistance. The buyers, on the other hand, will target upside breaks to position for a rallies into new highs.
Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the sellers will look for a rejections around the trendline and the resistance, while the buyers will look for upside breakouts. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the US PPI and the US Jobless Claims figures. Tomorrow, we conclude the week with the US Retail Sales, the University of Michigan Consumer Sentiment report and the Trump-Putin summit in Alaska.
