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Original title: Multiple factors jointly impact international oil prices after afternoon diving by over 4%
The Financial Associated Press (Shanghai Editor Liu Rui) reported that on Monday afternoon, the decline in international crude oil continued to expand. As of press time, the decline in WTI crude oil expanded to 4.2% to 65.41 US dollars per barrel; Brent crude fell 3.85% to 67.98 US dollars per barrel .
From a fundamental point of view, the intensification of the global epidemic and the overcast demand for crude oil is the main reason for the decline in crude oil prices. In addition, the non-agricultural employment data released last Friday was better than expected, and the strengthening of the US dollar also suppressed crude oil prices. From a technical point of view, the intraday oil price fell below the key support level, triggering a further expansion in the afternoon decline.
Delta outbreak raises concerns about crude oil demand
The decline in international crude oil prices has begun last week. Last week, Brent crude oil futures fell 6%, the largest weekly decline in 4 months; WTI crude oil fell nearly 7%, the largest weekly decline in 9 months.
Royal Bank of Canada analyst Gordon Ramsay said in a report: “As the infection rate of the Delta variant virus accelerates, the market has resurfaced concerns about the potential decline in global oil demand.”
For market participants, China is the world‘s second-largest oil consumer. The recent domestic epidemic situation is also a reason for the gloomy outlook of global crude oil demand and the decline in oil prices.
According to official data, as of 23:00 on August 8, my country has 15 high-risk areas and 201 medium-risk areas across the country. From 0-24:00 on August 8, 31 provinces (autonomous regions and municipalities directly under the Central Government) and the Xinjiang Production and Construction Corps reported 125 new confirmed cases, an increase from the previous day’s 96 cases. Due to the severe epidemic, flights in many places have been cancelled.
In addition, US non-agricultural data also has a certain impact on international crude oil prices.
The U.S. non-agricultural employment data released last Friday was better than expected, which intensified the market’s worries that the Fed might tighten its bond purchases earlier, causing the U.S. dollar to rush higher and commodity prices to be suppressed.
Breaking of key support levels leads to technical breaks
From a technical perspective, WTI crude oil futures hovered around US$67 in the morning after a gap in the morning. With active trading in the European and American markets in the afternoon, the price of WTI crude oil fell below the key support level of around US$67.15 per barrel. It is the position where the 100-day moving average (red line) and the key trend support line (white line) are located. After falling below this position, some stop losses for multiple orders were triggered, causing the decline to expand further.
The next key support level facing WTI crude oil is the July 20 low of $65.01/barrel. Once it breaks, the market will be further bearish on oil prices. The support below will focus on the May 24 low of $63.63/barrel and the May 21 low of 61.56. USD/barrel.
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