Asian markets VS European disappointment!
While Asian stock markets ended this week as one of their best weeks in recent months, Oil prices have also risen before falling lower. Japanese central banks and Chinese policies have been supporting the Asian stock markets in recent weeks, while European and US markets were still under pressure. This contradiction in the central banks' policies and different markets created a volatile week for WTI.
On the other hand, while Asian markets are growing, investors are concerned about rising covid cases in China. Adding less demand for gasoline in the US to this mess will make it more straightforward why we can not be that positive about further increases in the prices.
Supply and demand are the main factors for the price of any asset in the market; the same is for oil. On the demand front, as is happening in the US, it is possible to see lower use and demand in other markets because of higher prices and killing inflation. Higher prices and unbridled inflation also have reduced the number of international trips and flights, especially recreational trips and flights, which means less demand for energy!
On the supply front, its looks like war and geostrategic. Earlier this week, President Biden in Saudi Arabia met the Arab Nation leaders, and one of the most essential titles was about oil production. I am not sure if Saudi Arabia will cooperate much with the United States in increasing production. Saudis officials will be more interested in rooting under Biden's feet and seeing a Republican government in power than the Democrats.
Moreover, while the United States was discussing with Arabic countries, Russia was not sitting idle. Just two days after the US maneuver in the Middle East, President Putin went to Iran for a two-day trip and met the Iranian leader and Turkish President, Mr. Erdogan, to prove that he is not so isolated. After that, we also had a report that Russia's President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman discussed more close cooperation within the boundaries of OPEC.
The OPEC meeting will be in the first week of August, and traders are concerned if the cartel will release more oil or not, as prices, despite the latest weakness, are still painfully high.
From the technical point of view, the first support sits at $92.50, but the critical support at $88.50 is the determining level for the more intense downward trend. On the flip side, above $103, doors will open for more bull-run.
