China’s Economic Impact: Oil Prices Slip Amidst Global Concerns
Oil is experiencing a decline due to the weakening Chinese economy.
FUNDAMENTAL OVERVIEW:
On Wednesday, oil prices declined, driven by sluggish economic activity in China, a major crude importer. However, the possibility of a first monthly gain since September persisted, as escalating tensions in the Middle East raised concerns about the supply.
The official factory survey on Wednesday revealed that manufacturing activity in China, the second-largest global economy, contracted for the fourth consecutive month in January.
The most recent indication of the nation’s overall economic challenges surfaced just days after a court-mandated liquidation of the beleaguered real estate developer China Evergrande (HK:3333). Notably, the real estate sector constitutes a quarter of China’s GDP.
Prominent forecasters, including the Organization of the Petroleum Exporting Countries (OPEC), anticipate that the primary driver of oil demand growth in 2024 will be Chinese consumption.
On Wednesday, the Houthi group aligned with Iran in Yemen declared its intention to continue attacking U.S. and British warships in the Red Sea, citing self-defense. This announcement raises concerns about potential prolonged disruptions to global trade.
BRENT CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Brent Crude Oil is trading within an up channel.
Brent Crude Oil is positioned above 5&20 Moving Averages (SMA).
The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 83.43
Immediate support level: 81.15
HOW TO TRADE BRENT CRUDE OIL
After a significant decline, Brent Crude Oil found support and began trading higher. It subsequently broke through a crucial resistance zone, and as long as it remains above this zone, further upside movement can be anticipated.
TRADE SUGGESTION- LIMIT BUY– 80.81, TAKE PROFIT AT- 83.99, SL AT- 79.15.
