Oil prices have moved sharply lower as risk assets sell-off, stuck between $70-80, but the rallies have not reached the resistance level. The price has pierced the support and could be $60.
USOIL – Weekly Chart
Oil prices had risen in early Asian trading to reverse the previous day’s drop, which was helped by a more robust OPEC outlook on China’s demand. However, the European session has been plagued by further problems at Credit Suisse. The Swiss bank is hurting stock futures.
The Organization of the Petroleum Exporting Countries (OPEC) raised its forecast for China’s demand again due to the relaxation of covid restrictions. However, the group left its total demand steady due to global growth and slowdown fears. Meanwhile, the IEA said Russia’s oil export revenues had fallen to $11.6 billion last month, down $2.7 billion from January, when volumes were higher.
“It remains to be seen if there will be a sufficient appetite for Russian oil products now that the price cap is in place or if its production will start to fall under the weight of sanctions,” the IEA said. “Revenues are already dwindling,” the agency said.
Crude Oil Market Forecast
Last week Goldman Sachs said that oil prices could rise to $107 a barrel by the end of the year from the current $80 if OPEC responded to emerging market conditions. That number is still possible, but the price of crude could be lower by the recent market turmoil.
Traders will look to Wednesday’s US inventory data for guidance on stocks. Still, the numbers could take a back seat to the negative sentiment surrounding risk assets and global growth. Commodities were dragged lower across the board, but gold was able to mount a rally as the defensive safe haven came back into demand. Gold prices were 1% higher on the day, with a current price of $1,924 per troy ounce.
