Crude oil prices are set for a weekly loss, as rising coronavirus delta variant cases and China’s unexpectedly underwhelming manufacturing data weighed on sentiment.
Despite Friday’s small gains, which came on the back of Middle East tensions, crude oil price on the Brent benchmark looks set for its biggest weekly loss in a while after rising cases of the delta variant continue to cause demand concerns.
Major oil importers such as China, Japan and India are grappling with increasing case counts and are expanding emergency restrictions in major cities. In the US, new cases are rising to highs not seen since February.
Downside pressure on crude oil prices was slightly offset by rising tensions between Iran and Israel in the Middle East over a drone incident.
Crude oil price is down 0.45% on the day but trades 5.68% lower this week as of writing.
Brent Crude Oil Outlook
The redrawn trendline, which cuts across the lows of 21 May and 21 July, has supported price action for the week. The bounce also comes off the 70.01 price mark. This bounce led to an intraday violation of 71.44. Bulls could not sustain this move, and the price dropped back between 70.01 and 71.44. Recovery in crude oil price requires a break of 71.44, enabling bulls to push towards 73.34 and 75.52.
On the other hand, a breakdown of the 70.01 support and the redrawn trendline could lead to a price drop that targets 67.74. Further decline leads to 66.81 and 65.95 coming into the picture as additional targets.