USOIL Snaps 7-Weeks Profitable Streak on Fed, China Fears
USOIL Analysis
Wednesday's minutes of the last Fed policy decision had a hawkish bias that kept the door open to further hikes [1]. Along with strong economic releases this week, they add credence to the higher-for-longer narrative and markets are coming to terms with that prospect. China's recovery meanwhile falters, as the stream of negative data continued, while focus shifts to the troubled real estate market, as property developer Country Garden faces difficulties.
Prospects for further monetary tightening in the US and renewed fears over China's recovery, don't bode well for USOil, as the two countries are the top consumers of oil. Earlier this month, the international Energy Agency (IEA) maintained its demand growth for 2023, but lowered it for the next year. [2]
The above news send USOil towards its first losing week in around two months. This creates risk for a breach of 78.80-77.98 and daily closes below it would halt the bullish bias. The downside seems well protected though and we are cautious around prospects of sustained weakness.
OPEC+ cuts are set to lead to tighter oil markets in the second half of the year, the US economy performs better than expected and China's authorities are taking action to prop the recovery. As long as it defends the 38.2% Fibonacci and the EMA200, the slide is viewed as a limited correction that will allow it to push for new 2023 highs (84.91), although 90.36 remains distant.
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 18 Aug 2023 https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20230726.pdf | |
| Retrieved 18 Apr 2026 https://www.iea.org/reports/oil-market-report-august-2023 |
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