Crude oil price has remained under pressure amid the persistent woes over global economic growth. In fact, these concerns have offset the support emerging from OPEC+ production cuts. Notably, the situation in the US and China, the two leading economies, has contributed to these fears.
The state media readout from the meeting of top Chinese leaders held on Friday highlighted that domestic demand remains insufficient. During the event popularly referred to as Politburo, the leaders further noted, “At present the positive turn in China’s economy is primarily one of a recovery. Internal drivers still aren’t strong”.
China is the leading importer of crude oil and second largest consumer of the commodity worldwide. As such, concerns over its economic recovery remain a key bearish driver of oil prices.
At the same time, investors are eyeing crucial economic events from the US for cues on the direction of crude oil demand in the largest economy. In particular,the focus will be on the Fed interest rate decision and jobs data due for release in the course of the week. Additional interest rate hikes by the Fed may boost the US dollar while weighing on oil prices.
Brent crude oil price prediction
After rebounding in the past two sessions, Brent futures began the new week on its back foot; erasing some of the previous gains. As at the time of writing, it was down by 1.78% at 78.82.
A look at it daily chart shows that crude oil price continues to trade below the 25 and 50-day
exponential moving averages. Besides, in the past week, the formation of a death cross further signalled that the asset may remain under pressure in the ensuing sessions.
The bearish formation occurs when a short-term MA crosses the medium or long-term one to the downside. In this case, the 25-day EMA crossed the 50-day EMA to the downside.
Since rebounding to a one-month high on 12th April, crude oil price has dropped by over 10%. Amid this bearish trend, the bulls are keen on defending the support at 77.45. A decline past this level may give the bears an opportunity to retest the lower level of 75.25.
On the upside,80.05 is a resistance level worth watching in the immediate term. However, with further rebounding, the next target will be 82.00.