[Bitop Exchange Market Observation] Market Concerns Over Crude Oil Demand Rise, Crude Oil Prices Weaken Across the Board!
On Friday (May 24) during the European early trading session, U.S. crude oil continued its downward trend, currently trading around $76.57 per barrel. Oil prices have fallen for the fourth consecutive day due to market concerns that if inflation surges, U.S. borrowing costs may be raised again, potentially harming oil demand. The minutes from the Federal Reserve’s latest policy meeting, released this Wednesday, showed that the Fed’s response to persistent inflation will “involve maintaining” the policy rate range, but the minutes also reflected discussions about possibly further increasing borrowing costs.
Additionally, data from the U.S. Energy Information Administration (EIA) released this Wednesday showed that U.S. crude oil inventories increased by 1.8 million barrels last week, while the market had expected a decrease of 2.5 million barrels, which also put pressure on oil prices. Globally, concerns over weak refinery demand and ample supply, along with the increased likelihood of the Fed raising interest rates in the third quarter, have limited oil prices.
From a daily perspective, after surging to the $80 level on Monday and then pulling back, oil prices have now declined for four consecutive trading days and have fallen below the strong support level around $76.7. In the absence of positive news, further declines are expected, with support seen around $75.5. On the four-hour chart, oil prices have been oscillating and falling since surging to $80 on Monday. On Thursday, they rebounded from below $77 to $78.66 per barrel before ultimately giving up gains and breaking the strong support at $76.7. Currently, the Bollinger Bands are opening downward, and oil prices are between the middle and lower bands. The KDJ and MACD indicators are both showing downward trends, suggesting an overall bearish outlook.
In summary, after encountering resistance at the $80 level, crude oil prices have retreated and fallen below the previous strong support line at $76.7. There are no signs of a bottom yet, and it is expected that before the OPEC+ meeting on June 1, oil prices are unlikely to see significant improvement. Therefore, the short-term trading strategy for today suggests focusing on selling on rebounds, with buying on dips as a secondary strategy. In the short term, attention should be paid to the resistance range of $78.0-$78.5 and the support range of $75.5-$75.0.
Disclaimer: The article is contributed by the market analyst from Bitop market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.
