Oil Prices Decline Due To Ceasefire Talks And Demand Worries

Fundamental Analysis

* Crude Collapse: Crude oil prices have fallen to a six-week low amid expectations of a ceasefire in Gaza and increasing concerns about demand in China. Efforts to mediate a ceasefire between Israel and Hamas, based on a plan proposed by U.S. President Joe Biden in May and facilitated by Egypt and Qatar, have intensified in the past month. Israeli Prime Minister Benjamin Netanyahu informed the families of hostages held in Gaza that a deal for their release might be near, despite ongoing conflict in the area. Furthermore, concerns about declining demand in China are also impacting oil prices, as the country’s GDP growth fell short of expectations, registering 4.7% instead of the anticipated 5.1%.

Technical Analysis

* Technical Breakout: Crude oil price was traded lower following recent breakout below the previous level 78.50. MACD which display bearish momentum signal coupled with bearish market structure breakout suggest the commodity to further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 75.30. Conversely, a potential reversal is also to be expected and the price could head towards 78.50.

Potential Risks

Moving forward, investors will closely monitor developments in the Middle East, as a successful ceasefire agreement could potentially lead to significant market volatility. Additionally, the market will focus on upcoming U.S. data, particularly the oil inventory report scheduled for release on Wednesday.

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Monitoring

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