Crude Oil Price Slips as China PMIs Disappoint Ahead of OPEC+. Where to for WTI?

[MongiIG]

Aug 1, 2022 | DailyFX
Daniel McCarthy, Strategist

CRUDE OIL, WTI, BRENT, CHINA PMI, OPEC+, FED, FOMC, JPY, NZD - TALKING POINTS

• Crude oil prices slide lower on a lower than expected China PMI number
• APAC equities are steady, and currencies have had a quiet start to the week
• The OPEC+ meeting this week appears to unlikely to add to production

Crude oil dipped on Monday after Chinese manufacturing PMI data came in at 49.0 instead of 50.3 anticipated and a prior read of 50.2. The WTI futures contract is nearing US$ 97 while the Brent contract is trading around US$ 103bbl.

This is ahead of Wednesday’s OPEC+ meeting where hopes of adding to production might be difficult to achieve. The cartel is undershooting their current target by 2.7 million barrels per day according to the May data provided by the organisation.

WTI CRUDE OIL TECHNICAL ANALYSIS

WTI crude oil made a three-week high on Friday, but it has pulled back to familiar levels. That high and a previous peak might offer resistance at 101.88 and 100.99 respectively.

The price has not closed above the 21-day simple moving average (SMA) since mid-June and a close above it might indicate a resumption of bullish momentum.

On the downside, support may lie at the 200-day SMA, currently at 94.45. Further down, the prior lows of 92.93, 90.56 and 90.06 could also provide support. The latter is the lowest WTI has traded at since the outbreak of the Ukraine war.

Chart created in TradingView