- Crude oil initially rose on Tuesday after reports of continuing attacks on ships near Yemen.
- Economic data continues to weaken, hurting Crude Oil offers.
- OPEC production shows an unexpected rebound, putting further pressure on WTI offers.
WTI crude oil bids fell on Tuesday after a reversal from the day's early peak near $73.70, sending barrel bids back toward $70.00 as energy markets face downward pressure from multiple fronts. .
Crude oil supplies briefly recovered after reports that an Iranian warship had entered the region. The Iran-backed Houthi rebels have declared their intention to continue attacking ships traveling through the key waterway connecting Europe and Asia, but most logistics companies that initially diverted cargo ships around South Africa have resumed their voyages through the disputed waters under the protection of a coalition naval fleet led by American warships.
Market fears of supply disruptions remain unrealized, deflating near-term price gains, and near-term action sees a new round of selling pressure after production figures from the Organization of Exporting Countries Oil (OPEC) rose unexpectedly, adding 48,000 barrels per day to monthly production of 26.53 million bpd.
Adding to the bearish pressure, US economic data missed the mark again: the S&P Global manufacturing Purchasing Managers' Index (PMI) for December fell to its lowest level in four months, 47.9 points. Markets expected the figure to hold at November's 48.2, and the weakening US economic outlook is reducing risk appetite, sending crude oil lower on the charts as investors return to the safe haven of the US Dollar and sell stocks and commodities to start the 2024 trading year.
Technical outlook for WTI
Tuesday's rejection of the 200 hourly moving average (SMA) near $73.75 leaves WTI at lows and ready to challenge the $70.00 zone. Crude oil is down from last week's high at $76.22, down nearly 8%, as barrel bids move away from the 200-day SMA parked near $78.00.
Crude Oil is in a steady bearish trend and is heading towards the December bottom near $68.00 as the price action looks set to continue accelerating to the lower side with WTI set for a fourth consecutive bearish day on the daily candlesticks as the Offers see a technical top from the bearish crossover of the 50-day and 200-day SMA.
WTI Hourly Chart
WTI Daily Chart
WTI technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
