Demand in China is struggling
From the beginning of the day, crude oil is down 4.63%. CL (Crude Oil Futures) is now at 87.66$. China could be the main reason for the commodity’s decline. Firstly, China’s demand for oil is down 10% in a year-to-year comparison. The latest economic data from China are lower than expectations. Industrial production, retail sales, and factory orders show a ‘disturbing’ slowdown in the country. Unemployment fell to 5.4%, but the workforce in the age frame 16-24 elevated to 19.9%.
China made a rate cut on one-year and seven-day lending rates by 10 basis points. It definitely signals that China has a big problem with its current economic situation and has to take steps.
Read more: EU is, officially, without Russian coal
30 minutes chart of CL (Crude Oil Futures), Monday’s decline. Source: tradingview.com
Iran’s nuclear deal soon to be approved
A long lasting nuclear deal is back on the table. And it could finally be approved. The possibility of approving this deal could open doors for Iran in the field of the oil business. It means that Iran can fully export its oil to the global market. An additional flow of new crude oil can send the price of oil down. Foreign Minister Hossein Amirabdollahian said that Iran will let the European Union know about its position on the deal. In case the nuclear deal is going to be approved, it is going to signal a massive economic connection between Iran and the “west” countries.
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Levels of interest
The price is attacking a low from April at the level of 85$. An alarming economic slowdown in China and more oil in the global market from Iran could have a negative impact on the price of crude oil. The next support based on monthly futures volume could be around 80$ and 75$. Despite this, oil is still up 20% this year and the next resistance is around 92.67$ and 97.70$.