OIL Price continue bearish since mid of JUNE
Despite a worsening outlook for global economic growth, particularly a slowdown in Chinese economic growth, the German economy has plummeted to the lowest level in at least a decade, with market gloom surpassing the impact of COVID-19 and planning of production increase from Iraq, oil settled at its lowest level in more than six months.
Crude oil dropped around 3.5% to close below $87 a barrel on Tuesday, a thinly traded summer session. As a result of bearish US economic data, including a rapidly cooling manufacturing sector, the benchmark had already weakened. That followed by the lower-than-expected Chinese economic data.
Moreover, in talks between Iran and European Union negotiators, progress was made toward a renewed nuclear deal that could allow crude shipments from Iran. By removing or modifying sanctions against Iran, an additional 1.3 million barrels of oil could be supplied daily.
Iraq is planning to increase its crude oil production to phased targets of 5 to 8 million barrels per day (bpd) over time, according to the first vice president of the Iraq National Oil Company (INOC), Hamid Younis, last week.
However, the primary driver of the weakness, which could keep prices around $90 or lower, is the threat of recession around the world and the Chinese lockdowns.
Trade recommendation, oil investor could sell at $87 by placing protective stop at S91 and take profit at $82
Analyzed by: Mr. Nhim Kosol Business Manager of PP Link Securities
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