The commodity made a solid start to the week, helped by renewed hopes for a Fed pivot, after Friday's data from the US that allow a less aggressive stance. CME's FedWatch Tool prices in a small 25 basis points rate hike in the next meeting , with Chair Powell not commenting on policy yesterday, during a panel discussion on central bank independence.
Oil prices were also supported by optimism around China's reopening effort, as the country eased restrictions on international flights on Sunday , continuing its shift away from the strict zero-covid policy.
However, the World Bank warned yesterday that the recovery in the world's second biggest economy and largest importer of oil "may be delayed if reopening results in major outbreaks that overburden the health sector and sap confidence". 
The World Bank also slashed its 2023 GDP forecast to 4.3% for China (from 5.2% in the June projections). The US is expected to grow by an anemic 0.5% (from 2.4% previously) and global GDP by 1.7% (from 3.0% previously).
These projections along with a surprise built in API US oil stockpiles, put pressure on prices and markets now turn to the EIA inventory data and Thursda'sy US CPI inflation update, that can affect the trajectory of the commodity.
USOil is in a precarious position technically, after the rejection of the 38.2% Fibonacci of the November High/December Low. This creates risk for fresh multi-month lows (70.06), but sustained weakness below this level continues to have a higher degree of difficulty.
On the other hand, USOil shows resilience and we can see a push back above the key 77.80-79.11 region. This could negate the downside bias, but we are cautious for further advance towards and beyond 84.70.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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