Notable declines in Oil dominate early trading sessions
Oil trading commenced with a downward price gap of over 1% compared to last week's closing price.
OPEC alliance is scheduled to hold a meeting on November 26.
Market participants are eagerly anticipating the release of major inflation data and the Producer Price Index (PPI) in US.
Weak economic data from China is heightening concerns regarding oil demand.
Economic developments impacting Oil prices and Dollar
After a more than 2% surge in last week's trading, oil has resumed a downward trend at the start of this week. This shift coincides with Iraq reiterating its commitment to OPEC+ production levels, setting the stage for the alliance's upcoming meeting in two weeks.
Scheduled for November 26, the OPEC+ meeting involves the Organization of the Petroleum Exporting Countries (OPEC) and key allies such as Russia. Concerns about diminished demand, fueled by recent weak economic data from China, have taken center stage, overshadowing worries about potential production disruptions amid escalating geopolitical tensions in the Middle East.
Adding to the complexity, Chinese refineries, major consumers of oil, have sought reduced supplies from Saudi Arabia, the leading global oil source, for December.
The current week brings heightened anticipation for crucial economic data releases, including major inflation figures, the Producer Price Index (PPI), and retail sales data from the United States. Markets are also keenly observing industrial production data and retail sales figures from China.
In the trading realm, oil kicked off the week with a noticeable decline, hovering around the $76 per barrel mark, reflecting a decrease of approximately 1.35%.
Key pivot levels and technical influences on Oil movements
Following a dip that tested the $75.00 support level, oil rebounded and is now poised to challenge the $77.75 resistance. A successful breach of this level could extend upward momentum, potentially testing the upper boundary of the current descending channel within which oil is trading—estimated in the $79.50 to $80.00 range.
Conversely, a retreat from current levels without breaking the $77.75 resistance may prompt a decline, testing support at $75.00. A breach of this level could contribute to further declines, possibly towards the $70.00 threshold.