Crude oil futures are settling at $70.77. That is down $-3.04 or -4.12%. The low price for the day reached $70.13. The high price was at $73.95.
Saudi Arabia announced that they would cut crude oil prices particularly for Arab Light Crude to Asian customers by $2 per barrel. The move is viewed as a reaction to the high U.S. crude production and weakened demand from China.
Previiously, OPEC+ have reduced their production by 2.2 million barrels per day. Despite these efforts and ongoing geopolitical tensions in the Middle East, these factors have not significantly affected crude oil supplies.
One problem for the cartel, is the U.S. market remains robust, with a high crude output of 13.2 million barrels per day and a notable increase in crude exports to 5.2 million barrels per day.
Saudi Arabia’s strategy to cut prices is seen as an attempt to maintain its market share.
Technically, looking at the daily chart the low from last week reached $69.28. That is the next target to get to and through to increase the bearish bias. Below that, and the December low at $67.71 will be targeted followed by a swing area between $66.80 and $67.15.
On the topside, it would take a move above $75.63 to give the buyers more control on the daily chart. That level represents the broken 61.8% retracement of the move up from the May 2023 low. On December 26, the price extended above that level, but could not sustain the upside momentum, and rolled over to the downside.
The price action of late has been more sawtoothed:
- December 18 week saw a gain of 2.48%
- December 26 week saw a fall of -2.60%
- January 2 week saw a gain of 3.01%
The fall today reverses last week’s gains. The saw-toothed pattern continues.
This article was written by Greg Michalowski at www.forexlive.com. Source