Oil and other commodities feeling better this week

Oil Break Below $100 Again, As Commodities Dive on Chinese Lockdown

Posted Monday, April 25, 2022 by
Skerdian Meta • 1 min read

Oil and other commodities feeling better this week

It seemed like we left behind the coronavirus, after the omicron variant turned out to be quite mild and restrictions were eased in January. But, the new restrictions and lockdown in China are getting investors worried again and commodities are declining across the board.

The sentiment is taking a knockdown on fears that strict lockdown measures will spread to Beijing after the capital city required everyone living or working in Chaoyang district to take three COVID-19 tests this week and put more than a dozen buildings under lockdown.

Lockdowns in more than a dozen cities across the country, including the financial hub of Shanghai, have heightened worries over wider disruption to economic activity and raised some doubts whether China will be able to reach this year’s growth target of about 5.5%. Dalian Coking Coal futures decline by 5.5%, Coke prices fell by %, Iron Ore futures plunge by 8.7%, the most-traded Shanghai Hot Rolled Coils futures fell by 3.5%, while Stainless Steel futures are down by more than 4%.

Crude Oil Daily Chart – WTI Is Below the 50 SMA Again

As a result, crude oil has taken a dive below $100although it wasn’t a big surprise considering that the sentiment had already turned bearish for crude oil last week, after it reversed lower making lower highs for the third time. The price stopped at the $50 SMA (yellow), while today we saw a bearish opening with a gap lower, taking the price below $00 and the decline continues. Now comes the support zone around $94, so let’s see if sellers will push the price below this support too.