Prices Continue To Move Lower On Uncertain Global Outlook

Oil prices ended last week down and they are lower again in today’s trading as the USD strengthened as protests in China over harsh Covid restrictions dampened the global growth outlook.

• WTI is trading down 2.9% close to its intraday low at $74.05/bbl and has broken through its medium-term key support of $74.96. It reached a high of $76.50 early in the session. It is now well below its 10-, 20- and 50-day moving averages. Brent is 2.8% lower at around $81.25/bbl after an earlier high of $83.93.
• Oil demand has been hit significantly by restrictions in China limiting the movement of people, which may be broadened. Given this backdrop, OPEC+ may cut output even more at its next meeting on December 4 or early in 2023.
• Asia continues to buy Russian oil and at a significant discount of over $33/bbl to Brent. (ANZ)
• There is very little scheduled for later. NY Fed’s Williams speaks, which will be important for the USD, especially if his comments are on the dovish side. Developments in China will continue to be important for their impact on the dollar. The main focus of the week will be US payrolls on Friday.