As central banks prioritize controlling inflation, a sequence of disproportionate interest rate increases by different central banks, in an effort to moderate scorching pricing pressures, is expected to or has already had a negative impact on global growth prospects. Oil will keep moving downward as recession fears increase.
The $123.50/bbl barrier was tried and declined four times earlier in June, according to the daily Brent Crude chart, which also displays a topping-out trend. Ever since price movement has formed a downward range and breached below the 20- and 5-day simple moving averages (SMA), with both breaks, lower being instantly verified.
With the 200-day moving average also visible at the bottom end of this region, the price of Brent is currently going towards a region of historical horizontal support around $100.83/bbl and $95.60/bbl. The psychological threshold of $100 per barrel, which is just beneath the top of the support zone, will serve as the first significant test.
Based on IG retail trade statistics, 58.24% of investors are net-long in US crude oil with the long-to-short ratio at 1 to 1.39. Net-long trades are up 11.49% from June 22 and up 37.47% from the previous week, while net-short trades are down 14.91% from June 22 and down 46.97% from the week before.
The fact that traders are net-long oil prices signals that they may steadily decline. We now have a greater Oil – US Crude-bearish alternative trading bias since traders are more net-long than they were on Wednesday and the week before, as well as because of previous adjustments.