WTI lower, but it has little to do with the upcoming OPEC+ meeting

Over the past weekend, China released its official NBS Manufacturing PMI for July. The print was 49.0 vs 50.4 expected and 50.2 in June. This is the fourth out of the last five months that the reading has been below the 50 contraction/expansion level. The main reason for the weaker pint, the closing and reopening of cities around the country due to Covid-19. In addition, Libya’s oil has risen to 1.2 million barrels a day according to Libya’s oil minister. The last time Libya was producing this much oil was back in April. Also, finalized today were the S&P Global Manufacturing PMIs for July out of Europe, all of which were below 50. To top it off, the New Orders component of the US ISM Manufacturing PMI decreased from 49.2 in June to 48.0 in July, further decreasing overall demand.

How to start trading oil

OPEC+ meets this week on Wednesday. However, last week several sources from the Organization of the Petroleum Exporting Countries said that member nations may agree to keep output steady or increase it slightly in September. Recall that it was just a few weeks ago that US President Joe Biden went to Saudi Arabia to ask for additional oil supply.

What is OPEC?

On Monday, WTI Crude Oil traded to its lowest level since July 14^th when it hit an intraday low of 90.95. Previously, WTI has been consolidating in a symmetrical triangle after hitting its highest level since July 2008, on March 7^th, at 131.48. Crude oil broke below the bottom trendline of the channel on July 5^th, near 103.19. Since then, WTI has been trading in a smaller symmetrical triangle between 90.95 and 105.60. On Friday, Crude oil broke above the top trendline of the smaller triangle and formed a shooting star candlestick formation, an indication of a possible reversal. On Monday, Crude broke below the bottom trendline of the triangle, reaching an intraday low of 94.11.

Source: Tradingview, Stone X

Trade WTI Crude Oil now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

If the price of WTI Crude Oil continues to move lower, first support isn’t until the lows of July 14^th, way down at 90.95. Below there, Crude can trade to the 61.8% Fibonacci retracement level from the lows of December 21^st, 2021 to the highs of March 7^th, near 89.51, then horizontal support at 85.90. However, if price reverses and begins moving higher, the first resistance is at the bottom trendline of the short-term triangle near 98.50. Above there, Crude oil can move to the top, downward sloping trendline of the short-term triangle near 101.50 and then Fridays highs at 103.99.

Source: Tradingview, Stone X

With negative manufacturing data beginning in China and continuing throughout the US session, WTI Crude Oil has been trading lower, down nearly 5% on Monday. Throw in an OPEC+ meeting with “no change, or slight increase in output” expected, and the supply side offers little help to support the price. If WTI can’t break back above the bottom trendline of the short-term symmetrical triangle, near 98.50, price could head all the way down to the July 14^th lows of 90.95!

Learn more about oil trading opportunities.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.