Crude oil tumbled to the $33.00 level in Asian trading as the market caught up to Friday’s bearish close in the U.S. Oil is losing support as lockdown measures in Europe hit the economic growth outlook and oil demand expectations.
The U.K. are the latest nation to impose a month-long lockdown and this is erasing the hopes for a stronger recovery in the world economy and in oil markets. Goldman Sachs added to the bearish tone saying in a report:
“We estimate that the move lower in prices since last Friday is equivalent to a downward revision of demand expectations by 2 mb/d in Nov-Dec and by 0.5 mb/d in 2021 (c. 0.7% of global GDP). This is in addition to the 1.2% strengthening of the broad USD TWI and also assumes Libya already producing at 1mb/d.”Advertisement
Markets are also concerned that a Joe Biden victory in tomorrow’s U.S. election could see a delay in the of fracking, or a move to reduce the U.S. reliance on fossil fuels. President Trump has bene critical of Biden’s policies on oil and has suggested that he will lead to job losses in the oil patch.
Markets will be volatile this week with the election and the path into year-end for oil will depend on the severity of the lockdown situation. Governments in Europe have slated December1-2 for the end of the latest lockdown, but the goalposts have been moved in the past.
Crude Oil Technical Outlook
Crude oil has fallen after last week’s bearish close and the the price has touched $33.00. There is some support at $32.00 but the risk/reward is unknown for the downside with the election ahead. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
Crude Oil Daily Chart