WTI crude oil falls through 88.20 support today to resume the decline from 124.12.The selloff came following a batch of weaker than expected economic data from China. In particular, refiners processed only 53.21 tonnes of crude oil in July, -8.8% lower than a year ago. The daily equivalent of 12.53m bpd was the lowest since March 2020. Overall, economic data prompt concerns of slowing oil demand from China.
On the supply side, it could be boosted is the US and Iran could revive the 2015 nuclear deal. Iran’s Foreign Minister Hossein Amirabdollahian indicated that an agreement can be concluded if the US agrees to three remaining issues.
Immediate focus is now on cluster support at 85.92 in WTI. Current fall from 124.12 is seen as the third leg of the corrective pattern from 131.82. Strong support should be seen from 85.92 to bring reversal to complete the pattern. Break of 95.91 resistance will be the first sign of reversal.
However, sustained break of 85.92 will argue that fall from 131.82 is probably more than just a correction. Deeper decline would be seen back to 62.90 support.
