Crude Oil Prices: Broke Dams down, lost only $10 per barrel today
Today's bearish breakout can lead to serious consequences even in the future for the next 3-5 sessions, at least. While I am at 18.26 Moscow time on Tuesday, July 5, the Light Crude Oil Futures Contract is being passed out of hand at $99.55, a decrease of -8.19% on a daily basis.
The market is terrified of a recession
The more than $10 per barrel lost by crude oil today in a matter of hours is a reflection of market concerns about an impending global recession, which will fatally lead to a drop in demand in the coming months.
Paradoxically, today's session comes on a day when, on the contrary, attention should have been focused on the supply side due to production disruptions due to today's strike of oil and gas workers in Norway.
Oil futures fell along with the stock market, which often serves as an indicator of oil demand, as it well reflects the mood of traders regarding the terrible economic downturn.
Recession, which seems to be the main goal of banks to contain an overheated economy, given the aggressive actions taken by central institutions around the world to limit inflation.
Technical framework for WTI
The histogram from 30 minutes clearly shows the actions of today's prices, that, after the initially sweetened upward tilt that lasted last Friday, they broke the dikes to decline in the afternoon, and they are all stable near the session lows.
Bearish forecasts were formed indicating new quota targets of 96.00/96.07 and 93.18 / 93.22. Forecasts remain active due to holding resistances updated to 101.50/55 and 104.90.
Resistance is the points where sellers are likely concentrated, so they will represent the points of a likely restart in the event of a recovery, especially if between tonight and tomorrow (Wednesday, July 6).
For the right balance between risk and benefit, it would be preferable to monitor prices with short positions only for any returns, at least to the first resistance, in any case from quotes not lower than 100.40. The scenario will be canceled by closing on a 30-minute chart above 104.90.