Oil demand is shriveling as the trade war between the U.S. and China trips up the global economy.
“Demand expectations for 2019 have so far been unrealistic,” said Mark Maclean, managing director at Commodities Trading Corp. in London, which advises on hedging strategies. “China has slowed faster than people expected and the trade war is still having a significant impact, the EU will not be a pocket for demand growth this year and the U.S. is also problematic.”
Though the International Energy Agency expects oil consumption to grow by 1.3 million barrels a day this year, Wall Street has been turning more pessimistic. Morgan Stanley said it expects growth of 1 million barrels a day, while JPMorgan Chase & Co. sees 800,000 barrels a day. That which would be the lowest growth rate since 2011.
In just three weeks, we went from $63.89 to $50.60, a decline of 20% and the process, price broke the daily demand at $56.75.
Now price founds itself at a critical level/zone, the weekly demand at $52.50.
Which also represents a 61.8% fib retracement.
The weekly demand at $52.50 is critical because if the bottom of the zone at $50 is breached.
There is nothing…no buyers to stop price from falling all the way down to the daily demand at $45.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.