WTI falls around $4.0 to $106.50 amid risk aversion flows

• WTI has fallen almost $4.0 a barrel to $106.50 on Monday amid risk aversion flows and demand problems in China.
• But technicians say that WTI remains in a short-term uptrend for now.

Heavy losses in the global equity space as investors remain concerned about central bank tightening, soaring inflation and slowing global growth weighed on crude oil markets on Monday. The WTI it last traded a little over 3.5% lower on the day at $106.50 a barrel, after hitting a high of $111.50 last week. But the technicians noted that as long as WTI can hold above its 50 and 21-day moving averages in the $103.40 and $105.10 areas respectively, the recent uptrend that has been in play since the last week of April should continue. in Game.

New evidence of weak demand in China is another factor cited by analysts weighing on crude prices on Monday. Chinese trade data released during the Asian session showed that while imports rose 7.0% mom in April, they still fell 4.8% mom for the first four months of the year. Meanwhile, Saudi Arabia cut the official selling price of its Arab Light grade for June delivery, which is often interpreted by markets as a sign of weaker demand. The country’s two largest cities, Shanghai and Beijing, continue to face varying degrees of lockdown as Chinese authorities continue to struggle to adhere to their zero-Covid-19 strategy.

Crude oil traders also remain focused on geopolitics as the EU moves closer to agreeing an embargo on Russian oil imports. Such an embargo, the current proposal of which would end nearly all EU purchases of Russian crude within a few months, is likely to lead to a further decline in Russian output, strategists have noted, likely keeping WTI above the $100 for now. The 27 EU nations must unanimously agree to any such oil embargo deal and it may take a few more days to get reluctant countries like Hungary to sign on.

Technical levels