Oil futures contracts closed lower on Thursday (22).
The commodity even showed more strength earlier, with signs of China on the radar, but lost steam in the wake of the worsening appetite for risk in the markets in general, with the expectation of maintaining a hard monetary tightening by the Federal Reserve (Fed, the US central bank), and the strengthening of the dollar.
WTI crude for February closed down 1.02% ($0.80) at $77.49 a barrel on the New York Mercantile Exchange (Nymex), and Brent for the same month fell 1.48% (US$1.22), at US$80.98 a barrel, on the Intercontinental Exchange (ICE).
Contracts rose nearly 2% earlier. THE Bloomberg reported that China may relax further measures to contain Covid-19, now regarding visitors from abroad, and the country’s economic reopening tends to support demand.
On the other hand, there is the fear that there may be a strong wave of cases of the disease, which for High Frequency Economics will weigh on prices in the energy sector at first.
Oil lost strength in the wake of a negative picture on the New York stock exchanges. Reading of the Gross Domestic Product (GDP) of the USA with a higher than expected number for the third quarter reinforced the expectation of high interest rates for a longer time by the Fed, to contain inflation, which tends to weigh on activity and, consequently, on consumption of the oil.
Oanda sees oil teetering, with investors “apparently ready for the holidays” at the end of the year. She claims that there is doubt about what will happen in China, with the reopening, and adds that the Organization of Petroleum Exporting Countries and allies (OPEC+) is ready to adapt in the coming months to whatever demand for oil requires.
For Oanda, WTI “appears to have a floor at the $70/barrel level and initial resistance level at $80/barrel.
Source: CNN Brasil
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