USOIL in Perilous Sate as Markets Monitor Data & Covid News from China
USOIL Analysis
Oil prices rebounded last week, mostly on optimism around a slowdown in the pace of rate hikes by the Fed and an easing of the strict Covid-19 rules in China. Big cities such as Beijing have ditched some pandemic requirements, as the world second largest consumer of oil softens its zero-Covid strategy, but infections remain high.
The economic impact from the pandemic disruptions has been evident in recent releases from China and today's trade figures were disappointing. Export and imports in USD terms, both contracted again in November, with their steepest declines since early 2020.
Meanwhile, recent data from the US, such as GDP, the Jobs report and Monday's services activity and factory orders point to a robust economy. This has firmed up again expectations around the Fed's rate hike path, which helps the USDOLLAR and sends USOil lower this week.
On Friday, the European Union had agreed on a $60 price cap on Russian seaborne oil [1], while on the supply side, OPEC+ opted against deeper production cuts. The group maintained its October decision to decrease output by a massive 2 million barrels/day. [2]
USOil sets fresh 2022 lows and is now in risk of breaking below the 200Weeks EMA (at 72.00-50), although we remain cautious around sustained weakness below this level. In any case, such a break would bring 62.41-61.72 in the spotlight.
The Relative Strength Index (RSI) points to oversold conditions which can limit the drop and give USOil a chance to react higher. However, a recovery above the 200EMA (mid-82.00) that would pause downside bias, would need a strong catalyst.
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 07 Dec 2022 https://ec.europa.eu/commission/presscorner/detail/en/IP_22_7468 | |
| Retrieved 18 Apr 2026 https://www.opec.org/opec_web/en/press_room/7060.htm |
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