Crude oil price has largely remained steady after Reuters reports say that the International Monetary Fund (IMF) has cut its global economic forecasts yet again.
The IMF has announced that it is cutting from 3.2% to 3%, its global growth forecast for 2019. The body is also cutting the 2020 global growth forecast from 3.5% to 3.4%, warning that the “global outlook remains precarious”.
US growth for 2019 is also predicted to grow by 2.4%, down from the July forecast figure of 2.6%. The 2020 growth forecast figure for the US has also been downgraded from 2.3% to 2.1%.
Chinese growth figures for 2019 and 2020 were also put at 6.1% and 5.8% respectively, representing drops of 0.1% from the July 2019 figure and the previous forecast for 2020.
The latest of the 2019 global growth forecast figures is the lowest that has been put forward by the IMF since the 2008 global economic meltdown.
The IMF is attributing the downgrades to the trade war between the US and China, stating that “US-China trade tensions will cumulatively reduce global gross domestic product (GDP) output by 0.8% by 2020.”
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WTI Crude Oil Technical Outlook
Crude oil price for WTI had fallen for the 2nd straight day, but has been able to regain some of its lost ground on positive sentiment from Brexit and the partial trade deal signed by the US and China. WTI crude is now trading at 53.50, which was the day’s opening price level.
Crude oil price continues to find support at the 52.28 price level (Aug 9 and Oct 2 lows). A break below this area targets the August 7 low, which is also the site of the double bottoms seen in June 2019.
Resistance in the near-term is seen at 54.20 (23.6% Fibonacci level). This price level also corresponds to the double bottom neckline. A break above this area will target the 55.73 support area (lows of March 5 – 11 and lows of July 19 -29).
Until price breaks either of these two price levels, price stays in the range defined by the support and resistance at 52.28 and 54.20 respectively.