WTI Oil Price Drops Amid Fresh Demand Concerns and Recession Fears

WTI oil prices came under pressure due to fresh demand concerns stemming from talks about a potential US recession, as disappointing US economic data support this scenario. This offset calming reassurances from US officials that the economy remains resilient and is heading towards a soft landing.

However, this may not be the case, as market panic has spilled over, hitting stocks the hardest. Rumors are circulating that the Federal Reserve might hold an emergency meeting soon to cut interest rates and try to mitigate the damage caused by some of the central bank’s past decisions.

Growing demand fears continue to push oil prices down, although this could be partially offset by increased supply concerns if the geopolitical situation in the Middle East deteriorates, as many signals currently suggest a larger conflict may be inevitable.

Bears are eyeing the psychological $70 support level, with the next key levels at $68.50 (monthly cloud base) and $67.70 (December 2023 low).

Immediate resistance is seen at the former low of July 30 ($74.60), followed by the falling daily Tenkan-sen ($75.26) and the broken 61.8% Fibonacci retracement level ($77.06).

Res: 74.60; 75.26; 76.34; 77.06
Sup: 72.46; 71.66; 70.00; 68.50