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Crude Oil Prices Trend Down As Global Demand Decreases

Since the beginning of this week, oil quotes are being corrected downwards. Today, prices are under pressure from US President Donald Trump and new data from the International Energy Agency (IEA).  Yesterday, Trump spoke at the New York Economic Club. Investors expected him to clarify the situation around the trade deal with China, hoping for positive comments. However, the president accused Beijing of fraud, saying that “no one has manipulated better or taken advantage of the United States more”. Moreover, he accused the EU of creating tougher, worse than Chinese, barriers to American trade. It can complicate US-Chinese trade negotiations and consultations with the EU. Today, the IEA released its annual global energy review, which indicates that global oil demand will slow down from 2025, as fuel efficiency improves and electric vehicles increase.

Today, the US API energy stocks report will be released. Previously, oil reserves grew by 4.260 million barrels. Continuation of this trend may put additional pressure on prices.

Support and resistance

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The crude oil price tests the level of 56.25 in the middle of Murrey trading range. After consolidation below, the decline will continue to 55.30 (the rising channel’s lower border) and 54.68 (Murrey [3/8]). The key “bullish” level is 53.81 (Murrey [5/8]). Its breakdown will let the price grow to 59.37 (Murrey [6/8]).

Technical indicators do not give a clear signal. Bollinger Bands grow, confirming the uptrend. However, Stochastic’s downward reversal and MACD decrease allow a correction.

Resistance levels: 57.81, 59.37.

mifinance

Support levels: 56.25, 55.30, 54.68, 53.12.

Turning to Currencies

EUR showed a moderate decline against USD on Tuesday, updating local lows of October 15. The euro got some support from macroeconomic statistics from Europe. German ZEW Economic Sentiment in November showed a sharp increase from –22.8 to –2.1 points with a forecast of –13 points. German ZEW Current Conditions for the same period rose from –25.3 to –24.7 points, which turned out to be worse than the forecasts of –22 points. The EU ZEW Economic Sentiment in November showed strong positive dynamics, increasing from –23.5 to –1 point with a forecast of –32.5 points. The pressure on the instrument, in turn, was exerted by the results of Donald Trump’s speech at the New York Economic Club. Trump remained true to his previous statements and touched very little on the topic of US-European trade relations, noting that the EU is increasingly setting up “terrible” trade barriers.

GBP/USD

GBP showed ambiguous dynamics of trading on Tuesday, interrupting the development of the “bullish” impulse formed the day before. The instrument was under pressure from contradictory macroeconomic statistics from the UK. Claimant Count Change in October rose sharply from 13.5K to 33K, while analysts had expected an increase of only 21.3K. Average Earnings ex Bonus in September slowed down from +3.8% 3MoY to +3.6% 3MoY with a neutral forecast. In turn, the Unemployment Rate in September fell from 3.9% to 3.8% (3M/3M). Today, the pound is also showing ambiguous dynamics, waiting for new drivers to appear at the market. Investors expect the publication of statistics on consumer and industrial inflation for October.

AUD/USD

AUD showed a decline against USD on Tuesday, having updated local lows of October 28. The further development of negative dynamics in the instrument was facilitated by Donald Trump, who spoke on Tuesday at the New York Economic Club. Investors were waiting for statements on the development of trade relations between the United States and China, which hovered before the signing of the preliminary agreement, but the US president did not say anything new about this. Trump noted that China is still striving to conclude a trade agreement, but the deal will only be signed on terms profitable to the US economy. If the agreement is not concluded, then the United States is ready to introduce new import duties.

USD/JPY

USD showed ambiguous dynamics against JPY on Tuesday, closing with a slight “bearish” margin. Moderate support for the Japanese currency is still provided by the uncertain situation surrounding the conclusion of a preliminary trade deal between the United States and China. Donald Trump’s speech on Tuesday again did not clarify this issue; therefore, one should not exclude further moderate growth in demand for Japanese currency. In turn, weak macroeconomic statistics from Japan does not allow the instrument to develop a more confident decline. Machine Tool Orders data published on Tuesday showed a decrease of 37.4% YoY in October after a decrease of 35.5% YoY in September.

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