Buying the Dip Again in Crude Oil On Saudi Pledge to Keep Prices Up
Crude Oil retreated more than $3 off the highs today, falling below $80, but we decided to buy and it has reversed back up now
Today is has been relatively quiet, without any major news headlines or economic releases, but there were some notable market movements. European traders appeared to be reacting to the disappointing trade balance report from China early this morning, which has brought back concerns about a potential economic recession in the country, which would affect the commodity dollars and Crude Oil.
This led to a shift towards more defensive risk strategies in trading, resulting in a decline in equities and a drop in bond yields. Notably, the 10-year Treasury yields retreated below the 4% threshold. Simultaneously, the US dollar maintained its strength from the Asian trading session and extended its gains throughout the session. The EUR/USD currency pair fell from 1.0980 to 1.0940, while the GBP/USD pair dropped from 1.2760 to 1.2700, effectively erasing the progress made yesterday.
The USD/JPY pair managed to hold relatively steady around 143.05, albeit slightly down from its earlier position of around 143.40, but it came after a strong surge of around 100 pips last evening. With a prevailing sense of risk aversion, the commodity dollars suffered the most. The USD/CAD pair saw an increase of 0.8%, reaching 1.3475, largely due to a substantial decline in oil prices during the day. Meanwhile, the AUD/USD pair experienced a significant drop of 1.1%, testing the crucial 0.6500 support level.
In response to the current market situation, WTI (West Texas Intermediate) crude oil experienced a decline of up to $3 earlier today, briefly reaching $79.90, before making a reversal and putting up a recovery to $81.30s. The decrease in prices is attributed to fears surrounding the Chinese demand, prompted by the release of disappointing trade data, along with persistent indicators of economic fragility.
Although, we decided to open a buy Oil signal, since the Saudi cabinet has restated its commitment to bolstering the precautionary measures taken by OPEC+ to ensure stability in the Oil market. This affirmation was reported by the state news agency. WTI made a decent reversal and now the rice is approaching our take profit target.
US WTI Crude Oil
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