Crude In Corrective Cycle, China & US Events Weigh On Prices

Oil prices fell further on Monday after dropping around 3% on Friday driven by China’s surprise rate cuts increasing concern over demand in the economy and US political uncertainty. There was also technical selling. The USD index is down 0.1%.

• WTI fell 0.5% to $78.24/bbl and it has started today around this level, below initial support at $78.59 opening $76.95. The benchmark is now down around 3% this month. It reached a low of $77.55 yesterday before returning above $78 again.
• Brent is also 0.5% lower at $82.26/bbl after an intraday low of $81.60, breaking initial support at $82.31 opening $79.32. While trend conditions remain bullish, a corrective cycle is in play. Initial resistance is at $87.95.
• Prompt spreads continue to signal a tight market though.
• Republican candidate Trump remains ahead in most polls and he has said he would boost US oil output which would be negative for prices. On the other hand, VP Harris is seen as less supportive of the sector and may be more likely to challenge its environmental record. She sued oil companies when she was California’s attorney general and has been more critical of fracking than Biden, according to Bloomberg.