Oil is heading for a hefty weekly loss of more than 7% as fears intensified over the gloomy demand outlook for crude markets.
The global commodity is trading near its lowest level since September amid concerns over China’s surging covid 19 cases and aggressive rate increases from central banks hitting the demand outlook. Given how the world’s largest oil importer is facing its worst outbreak in months with a series of economic readings painting a gloomy economic picture, this could limit oil bulls.
Looking at the technical picture, Brent remains under pressure on the daily charts. The recent breakdown below $90 could encourage a decline towards $87 and potentially lower. Given how prices are trading below the 50, 100 and 200 SMA, the path of least resistance is starting to point south. It may be wise to keep an eye on the upcoming IEA report next week which could result in some price volatility. Alternatively, a move back above $90 may inspire an incline towards $95 and back towards $100.