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Keeping the Bearish Bias in Oil As Fundamentals and Technicals Point Down

Posted Monday, August 22, 2022 by
Skerdian Meta • 1 min read

Crude Oil bounces as the USD retreats

Crude Oil has been on a bearish trend for more than two months, since the middle of Jun which is quite clear on WTI in the daily chart below. We saw a bullish retrace higher in the second half of the week, but it seems like the retrace ended at the 20 SMA (gray) on the daily chart, which has been acting as resistance since the beginning of July.

The lows keep getting lower and so are the retraces higher, while the positive talk around the Iran nuclear deal is weighing on oil, which is now down $2 on the day. WTI Crude broke the August low of $86.74 and it dipped below $86 for a short time. This is the worst level since early February. So the global economic slowdown and more Iran supply are weighing on Oil.

Crude Oil Daily Chart – The 20 SMA Defining the Downtrend

US WTI Oil forming a bearish reversing pattern below the 20 SMA after the retrace higher

Besides that, Myanmar plans to import Russian gasoline and fuel oil to ease supply concerns and rising prices, the latest developing country to do so amid a global energy crisis.

The Southeast Asian country has maintained friendly ties with Russia. Russia is seeking new customers for its energy in the region as its biggest export destination, Europe, will probably impose an embargo on Russian oil in phases later this year. “We have received permission to import petrol from Russia,” military spokesperson Zaw Min Tun said during a news conference on Wednesday, adding that it was favored for its “quality and low cost.”