Crude continues to slide

Crude prices were a touch firmer in early trade this morning. They were at this time yesterday too, but sold off later in the day to record another negative session. With front-month WTI trading below $71 per barrel, the price has broken below several possible levels of support, all of which acted as resistance over the last four months of 2024. Crude is now approaching the 76.4% Fibonacci Retracement of the six week rally which began in early December. If it is unable to find support here, then a return to last year’s lows around $65 can’t be ruled out. The daily MACD has plunged from the overbought levels seen three weeks ago, yet is far from being oversold. Fundamentally, it seems that crude just can’t get a break. Supply remains plentiful, and could be more so if US producers heed President Trump’s call to: ‘Drill, baby, drill.’ Mr Trump’s tariffs on China, and tariff threats elsewhere, haven’t helped. At the same time, the outlook for demand growth looks uncertain as China, the world’s biggest energy importer, struggles to cope with its economic slump, caused by the implosion of its real estate sector.