WTI Crude Oil Dropped to $31.80 – China Disappoints About Annual Economic Growth Target
During Friday’s Asian session, WTI crude oil prices flashed red and dropped to $31.80 while representing 6.3% losses on the day, mainly due to the high uncertainty surrounding the market on the back of the US and China’s ongoing tussle. Investors lost their confidence after China decided to impose a national security law on Hong Kong, which would increase the tussle between the US and China. The latest declines in oil prices could also be attributed to the report that China failed to set its annual economic growth target, which eventually weighed on the oil demand. At the moment, WTI Crude oil is currently trading at 31.45 and consolidating in the range between 30.74 and 34.00.
West Texas Intermediate (WTI) crude dropped by $1.79, or 5.3%, to $32.13 a barrel, after having gained more than 1% in the last session. In the meantime, Japan’s Nikkei index registered 0.55% loss and Hong Kong’s Hang Seng is reporting a 4% drop. Other major indices are also flashing red.
As we already mentioned, the fresh leg down in oil prices was mainly driven by China’s decision to set in motion a controversial national security law for Hong Kong secession. The new Hong Kong law would be able to ban secession, foreign interference, terrorism, and external interference. In return, President Donald Trump said the United States would react firmly if China imposes the law, while two US legislators were preparing a bill about imposing bans on entities involved in upholding the law.
This comes on top of the already existing issues between the two world leaders about the origin of coronavirus and China’s handling of the outbreak. Moreover, the risk-off market sentiment was further bolstered by the US’s offer to sell arms to Taiwan.
WTI crude oil prices are trading with a bearish bias of around 32.25 level, holding just below an immediate resistance level of 34.71 and 36.25. On the lower side, WTI prices may find support at 31.55 and 29.20 level. The MACD and RSI are also supporting bullish bias in US Oil. The idea is to trade bullish above 31 to target 29.10 and 28.16 today.
Good luck!
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