Oil prices remain under pressure today in spite of China announcing a major easing of Covid restrictions. While lifting movement and travel restrictions in the world's second largest economy is certainly positive for oil prices as it hints at demand recovery in China, oil prices failed to catch a bid today. Brent and WTI traded over 2% lower on the day, with WTI now trading over 12% below its latest local high reached on December 1, 2022. Oil price collapse is the most evident proof of how strong recessionary fears are in the markets. Positive news for oil prices, like Chinese reopening, G7 price cap or Russia's plans to set price floor for international oil sales, are being ignored by traders with concerns over the condition of global economy being a key driver for oil prices now.
Taking a look at Brent chart at D1 interval (OIL), we can see that the price deepened a recent drop today and moved to the lowest level since the turn of 2021 and 2022. It should be noted that the oil market got tighter following the launch of the Russian invasion of Ukraine, with Western sanctions kicking in, but prices are now over 20% lower than at the start of the invasion. The next support zone to watch can be found ranging below $76 per barrel.
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