Weekly Technical Forecast for Crude Oil – Losing Momentum

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Weekly Technical Forecast for Crude Oil

With the fears of the second phase of the Coronavirus pandemic, assets that are significant in tracking the global economic growth conditions have started pulling back. Both the crude oil and Brent oil have not been to recover back to the way they were before the COVID 19 pandemic outbreak in early March.

Forex researchers further indicate that the prices of crude oil may start facing an uphill task.

Review of Crude Oil Prices This Week

Last week was a great period for trading as the energy markets started pulling back, their 2nd loss over the past three weeks, and just the 2nd weekly loss from the the end of April. With the fears that the world’s greatest economy is stumbling from the Coronavirus pandemic. The energy markets have further taken a step back after some significant gains over the past few weeks.

With the substantial impact that the global economy is feeling from the lockdown necessitated by this pandemic. The world’s largest oil producers have been forced to cut down their production. At the same time, there are fears of the slower growth that will majorly affect the energy markets. Regardless of the existing near-term production changes. Last week, the crude oil and Brent oil prices lost -2.86% and -3.16% respectively.

Impact of The Economic Calendar Week On the Prices of Crude Oil

Early July and the end of the 2nd quarter coincides with the upcoming USA holding by the end of this week, which will result in a compressed economy calendar. Both the nonfarm payrolls and the USA’s initial unemployment claim reports will be published on July 2nd at 0830HRS GMT, likely resulting in increased volatility in the markets. But it’s expected that this will only be temporary.

Beyond the United States, nevertheless, huge data release is thin. With the last quarter-1 2020 UK GDP being due for release on Tuesday, June 30. But considering the time sluggishness over this reporting timeline and the manner in which the energy markets are becoming more sensitive with the hopes to find clues regarding the progress being made towards lifting the lockdown. It is highly unlikely that there will be any substantial imprint on the markets by the compressed economy calendar this first week of July. Here you will find more information about trading energies.

Essentially, considering the ever-changing nature of oil production. And the decreased demand as the global economy tries to rise from the lockdown. It is important to keep a watchful eye on the current EIA inventory data that will be released on Wednesday, July 1 at 14:30 GMT. This inventory data will significantly reinforce the current notion that this is just the beginning of a long-term occurrence. One where there would be a supply-demand deficits. It is highly likely that this will continue for the next few quarters or even years.

OIL LONGS REBUILD

Overall, evaluating the current positioning, based on CFTC’s COT data for the week that ended on June 23. Speculators reduce the net long oil positions to only 560.9K contracts. This was slightly up from the net-long contracts for the previous week, which was just 546.3K.

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