The price of crude oil fell for the 3rd consecutive day. Today the settlement price for the day came in at $83.74 down $-1.75 or -2.05%. That decline comes on the back of a fall of -2.94% yesterday and a fall of -0.33% on Friday. The price action is volatile as market react to mideast tension, Russia, and then there are the risks from the global economy. Europe PMI data today showed weakness and ECB's Lagarde warned of slower growth. In the US, GDP is expected to be north of 4% (or even 5% as the Atlanta Fed is up at 5.4%), but what above the 4th quarter?
Technically, the price decline moved into a downside swing area between $82.35 and $83.32. The low price today reached $82.95 and stalled. It will take a move below $82.35 to open the door for further downside momentum. If so, the 100 day moving average at $80.60 would be targeted.
On the top side, if the momentum of the swing area can hold support, traders will look toward the August high of $84.85 as the next key target. Get above and buyers can breathe more easily.
Also influencing the price action fundamentally includes:
- US Dollar Strength: The strengthening of the US Dollar had a negative impact on oil prices today. Oil is typically priced in US Dollars, so when the Dollar rises, it can make oil more expensive for buyers in other currencies, leading to lower demand and lower prices.
- Optimism in the Middle East: Optimism regarding geopolitical developments in the Middle East, specifically the lack of movement by Israel's IDF into Gaza, has contributed to the decline in oil prices.
Be aware that the private inventory data will be released at 4:30 PM ET.