OIL plunges 3.2% falling below $70 major support zone📉

After published this week quite 'bullish' OPEC+ report (expecting almost flat YoY global oil demand) and despite hurricane Francine hitting US East, Brent Crude futures (OIL) broke below $70 support zone today, indicating that traders expect lower global demand, with constantly erasing geopolitical premium as Middle-East conflict failed to escalate further (until now).

• Low oil prices made Russia's revenues from it to the lowest levels since February. OPEC+ chose to prolong production cuts for two months, but even that move failed to support short-term oil prices momentum, signalling that markets are looking for another, major sentiment shift factors;
• Hurricane Francine is moving towards the Gulf of Mexico, and some US oil drillers are evacuating, halting offshore production - but even that factor didn't stop oil declines. According to Bloomberg, Mysteel OilChem expects that China’s crude imports could drop another 1.2% this year. Traders await today American Petroleum Institute (API) report on US Crude inventories changes (9:30 PM BST).

Falling oil prices may support deeper US Federal Reserve rate cuts, (lower inflation risks) but may be a signal, that global economy demand is falling in faster, than expected pace while last OPEC+ market report may be seen as somehow 'disconnected' from the changing markets realty.

OIL (H1)

Major resistances are now set at $72 and $75 are (EMA50 and EMA200) while even testing $60 per barrel cannot be excluded if Chinese macro data will be still weak, with recession fears rising among US economy.

Source: xStation5