Sharp drop in crude oil – China shifts to Iran for oil supplies!

Crude oil is trading sharply bearish today and has already dropped more than 100 pips over technical and fundamental reasons. Let’s look at them:

1) We are already aware of the ongoing trade war between China and the US, due to which Chinese buyers of Iranian oil are beginning to move their cargoes to vessels owned by National Iranian Tanker Co (NITC) for almost all of their imports to keep the supply flowing. Despite the recent sanctions on Iran by the US and Eurozone, China seems to buy oil from Iranian companies to meet its oil demands.

Crude Oil – Daily Chart

2) Secondly, if you look at the daily chart of crude oil, you will notice it has tested the long-term upward trendline which was earlier violated at $66.35. Now the same support level is working as a resistance. Crude oil can face an immediate resistance near $65.20 and $64.67. Whereas, the bearish trend remains strong.