May 30, 2023
Oil fell lower on growing concerns.
Hot Forex Review

Oil fell lower on growing concerns.

Ahead of Good Friday’s Non-farm payroll data, it is worth noting that we will have a miserable week so far. Data published from the most developed economies show the seriousness of the economic recession.

After Thursday’s initial jobless claims, the red color of Wall Street’s main indexes confirms this fear among investors. Stronger-than-expected weekly jobless claims report confirms that rapid interest rate hikes by the Federal Reserve were slowing down economic growth and the labor market as well as its result. After JOLTs fell under 10 million for the first time since May 2021, weekly applies to receive unemployment benefits increased to 228K, while the previous week’s number also revised up to 246K from an initial estimate of 198 K.

The Dow Jones Industrial Average fell 0.3% during the first trading hours. The market seems torn between being satisfied with the possible easing of contractionary policies and economic stagnation. The S&P 500 opened lower by 0.23%, at 4,081.15, while the Nasdaq Composite dropped 57.78 points, or 0.48%, to 11,939.08 at the opening bell.

These doubts and market confusion over a potential global recession and demand reduction made Oil price fall on Thursday. However, the benchmark prices are heading for a weekly advance after OPEC+ announced further output cuts and US oil inventories dropped.

Earlier this week, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, called OPEC+, pledged voluntary production cuts. That helped the Oil price to continue rising for the third consecutive week before slowing economic data capped the bulls.

“Crude oil’s rally paused as it battled the headwinds created by the weak economic data. This offset more positive fundamentals,” ANZ Research said in a note.

Recession fear increased with the slowing Service Purchasing Managers Index on Wednesday, while earlier this week, the manufacturing sector also missed expectations on Monday.

From a technical point of view, while the price is moving flat and OBV is slowing down, we can expect more price decreases if the first support at $79.45 is breached.

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