Low Black Friday Turnout Points Lower in Crude Oil As Consumers Suffer - Forex News by FX Leaders
Oil is falling despite a weaker USD

Low Black Friday Turnout Points Lower in Crude Oil As Consumers Suffer

Posted Sunday, November 27, 2022 by
Skerdian Meta • 2 min read

Crude Oil was showing some bullish pressure in October and earlier this month, but it has been three weeks since it reversed lower and it seems like the door has been open now for further declines. Oil futures are showing increasing signs of easing supply concerns while the concerns about further weakness in crude oil demand have resurfaced.

China gave some bullish signals about reopening the economy last month, after three years of coronavirus lockdowns, wwhich improved the sentiment. But, they’re caving in and pushing restrictions further. Although I don’t think that they can continue doing this for too long, as the population is fed up, with the clashes between authorities and Apple’s iPhone workers taking plae overthe weekend.

China is the biggest importer of crude Oil so the lockdowns have a negative impact on demand as well as on the sentiment. Besides that, central banks conitnue to raiseinterest rates at a fast pace, with the Reserve Bank of New Zealand delivering a 75 basis points (bos) hike in last week’s meeting.

US WTI Oil Weekly Chart – The 100 SMA Has Been Broken As Support

The 20 SMA held as resistance for crude Oil

Besides that, the global economy is weakening and this week the manufacturing PMI report showed that this sector fell into contraction, while services fell even deeper. Amazon’s Jeff Bezos announced that they would lay off staff which comes ahead of the holiday season, while the turnout for Black Friday was the lowest ever.

This points to a slowing demand for crude Oil, as US WTI pushed below the 100 SMA (green) last this week. This moving averages acted as  support before, so the break lower opens the doof for further declines in the weeks ahead. We have turned beairsh since the rejection by the 50 SMA (yellow) at the top, so will keep opening sell Oil signals this week.

US WTI Crude Oil Live Chart

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