Crude oil fell $1.15, or 1.30%, to $80.76, driven by weak growth in China, the world’s largest oil importer, which has raised concerns about demand.
Another contributing factor may be the expectation that former President Trump will win the presidential election in November, as he is pro-drilling and has been critical of the Biden administration regarding drilling and its regulation.
China’s economy grew 4.7% in the second quarter, the slowest pace in five quarters, due to a debt crisis in the property sector, slowing consumer demand and high youth unemployment.
Oil prices continue to fall despite growing hopes for a U.S. interest rate cut (which could lead to higher demand and higher prices) after Federal Reserve Chairman Jerome Powell expressed confidence that inflation is slowing toward the central bank’s 2% target rate.
Technically, oil does not look very bearish, the price broke the 100-day moving average near $80.56 (see the blue line in the chart below) but could not maintain the downside momentum and settled above the moving average level.
On the new trading day, a return below the level as well as the natural support at $800 is necessary to keep the sellers happy. As for the buyers who are suffering from the price drop, their hope is to stay above $80.56 or more conservatively above $80.