Crude Oil Price Lower Today On Weak China Manufacturing PMI Data

Crude oil inventories and a weaker than expected China Manufacturing PMI data have contributed to lower crude oil price of the WTI blend today.

WTI crude oil is currently trading at 54.23, where it is currently finding support after bouncing at that price level yesterday. Price was lower yesterday on the back of higher crude oil inventories. Having found an intraday high at 55.52, crude oil price is back under pressure.

The China Manufacturing PMI index fell in October to 49.3, down from 49.8 as recorded in September and lower than the expected figure of 49.9. The PMI data for large and small-sized companies in China also fell from 50.8 and 48.8 respectively in the previous month, to 49.9 and 47.9, respectively in October.

This is the 6th straight month in which China Manufacturing PMI data have been lower than market expectations. Services PMI data also fell from 53.7 in September to 52.8. The markets had expected a 53.7 reading.

The weak China Manufacturing PMI data is an indication that the Chinese economy is slowing with downward pressure on manufacturing. China’s industries are very thirsty and drive the demand for commodities including crude oil. Weak manufacturing data increase the likelihood of lower crude oil demand (as already forecasted by the IEA), and lead to weaker crude oil prices.

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WTI Crude Technical Outlook

Crude oil price is now challenging the 54.40 support price (neckline resistance of June 2019 now in role reversal) and needs a sustained close below that price level to mount an offensive run to the next support target at 52.28. Such a move would also break price out of the bearish flag, which could lead to more downside for the pair.

Price recovery takes WTI crude oil to the 55.73 resistance area and above it, 56.65 if momentum is strong. Bias however is on the bearish side of things.Download our latest quarterly market outlook for our longer-term trade ideas.

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