USOIL Erases 2024 Gains after US Growth Scare
USOil Analysis
Signs of a slowdown in the US have been mounting for a while, but Friday's soft employment sparked recession fears and send markets into panic mode. The Sahm Rule was triggered [1], the 2/10 yields have disinverted and the consumer faces challenges as the pandemic savings pile is gone and credit card and auto loan delinquencies are on the rise.
The renewed recession woes exacerbated oil demand fears, just as its second largest consumer continues to face an uneven recovery. The International Energy Agency expects demand growth to slow substantially this year and the next and average just below 1 million barrel per day. [2]
Price pressures intensified and USOil is now in risk of new 2024 lows (69.26), although sustained weakness below 67.69 has a higher degree of difficulty.
The growth scare may be exaggerated however, as other indicators (like GDP) point to robust economic activity and resilient spending, while the jobs report was actually not that bad and unemployment at 4.3% can hardly be called recessionary. Recession fears once again prevailed over geopolitics, but risks of wider Middle East conflict is higher than ever after the killing of the leaders of Hamas in Iran and Hezbollah in Lebanon.
Markets are still in the eye of the storm, but once negativity subsides, USOil could find the opportunity to rebound. The EMA200 (black line) and the daily Ichimoku Cloud though pose significant hurdles.
Nikos Tzabouras
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. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 06 Aug 2024 https://fred.stlouisfed.org/series/SAHMREALTIME | |
| Retrieved 17 Apr 2026 https://www.fxcm.com/markets/insights/oil-prices-slide-as-demand-fears-outweigh-geopolitical-jitters/ |
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