Crude Oil Price Update – Down on Fears of Global Recession, Lower Demand

U.S. West Texas intermediate crude oil futures are trading lower late in the session on Thursday as traders fear the aggressive rate hiking campaigns by several major central banks will drive down demand by pushing the global economy into recession.

A stronger U.S. Dollar also contributed to the weakness by making the dollar-denominated asset more expensive for foreign buyers. The dollar strengthened on Thursday a day after the U.S. Federal Reserve said it expected interest rates higher for longer. Safe-haven buying tied to a huge sell-off in U.S. equity markets also gave the greenback a lift.

At 21:23 GMT, March WTI crude oil futures are trading $76.24, down $1.09 or -1.41%. The United States Oil Fund ETF (USO) settled at $66.21, down $1.15 or -1.71%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $70.56 will signal a resumption of the downtrend. A more through $83.14 will change the main trend to up.

The short-term range is $83.14 to $70.56. Its retracement zone at $76.85 to $78.33 stopped the rally earlier today at $77.81.

The minor range is $70.56 to $77.81. Its 50% level or pivot at $74.19 is the nearest support.

The main range is $89.89 to $70.56. Its retracement zone at $80.23 to $82.51 is potential resistance.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term 50% level at $76.85 is likely to determine the direction of the March WTI crude oil futures contract into the close on Thursday.

Bearish Scenario

A sustained move under $76.85 will indicates the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the pivot at $74.19.

Bullish Scenario

A sustained move over $76.85 will signal the presence of buyers. This could lead to a retest of the intraday high, followed by the short-term Fibonacci level at $78.33. This is a potential trigger point for an acceleration into $80.23 – $82.51.