CRUDE OIL PRICE OUTLOOK:
- Crude oil prices fell barely on Monday amid bitter sentiment and a stronger US Dollar
- Weaker Japanese crude import knowledge and gasoline gross sales in India weighed on the vitality demand outlook
- Traders awaited US ISM manufacturing PMI and Wednesday’s API report
WTI traded barely decrease throughout the APAC mid-day session because the DXY US Greenback index prolonged greater. Danger urge for food turned bitter following a Fed official’s hawkish remark about tapering, sending danger property broadly decrease on the primary day of Could.
Pandemic considerations remained on prime of merchants’ thoughts as viral resurgence troubled a few of Asia’s prime vitality importers. Japanese crude oil imports fell 25% in March to 2.34 million barrels a day, based on authorities figures. The nation confronted prolonged state-of-emergency measures as viral resurgence hit Tokyo, Osaka, and several other prefectures. Journey exercise was curbed in consequence, with Japan Airways and Nippon Airways reducing 1000’s of home flights subsequently. Diminished home journey and a halt of non-essential companies might convey a substantial impression to vitality consumption throughout the restricted interval.
India is struggling a fast surge in Covid-19 infections since early April, with day by day new circumstances surpassing 400okay on the finish of the month. Not surprisingly, the nation’s gasoline gross sales fell to the bottom since August, and diesel gross sales additionally declined, based on preliminary knowledge. India and Japan are the world’s third- and fourth-largest oil importers respectively. In whole, the 2 international locations consumed round 17% of worldwide oil exports throughout 2019.
On the constructive facet, China may even see booming oil demand throughout the Labour Day vacation from Could 1st to fiveth as journey exercise fuels petrol consumption. The pandemic state of affairs has largely been introduced beneath management domestically, permitting residents to journey freely throughout the vacation season. Based on journey service web site Journey.com, resort and flight bookings throughout this yr’s Labour Day vacation have surpassed the identical interval seen in 2019.
Cumulative Confirmed Covid-19 Instances per Million Folks – India, Japan and China
Trying forward, right this moment’s launch of US ISM manufacturing PMI knowledge shall be intently eyed by merchants. A stronger-than-expected studying might increase danger urge for food and buoy oil costs. On the flipside nevertheless, it could additionally spur tapering fears and lead the US Greenback to strengthen, which might exert downward strain on commodities. Wednesday’s API stock knowledge can even be intently watched by oil merchants for clues concerning the supply-demand relationship.
Technically, WTI shaped an “Ascending Channel” on the day by day chart. The sample is characterised by consecutive higher-highs and better lows, suggesting that total development is tilted to the upside. A right away resistance stage may be discovered at US$ 63.83 – the 61.8% Fibonacci retracement. A right away assist stage may be discovered at round US$ 62.57 – the 50% Fibonacci retracement.
The MACD indicator is trending greater above the impartial midpoint, suggesting that bullish momentum is dominating.
WTI Crude Oil Value – Each day Chart
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Feedback part beneath or @margaretyjy on Twitter