Crude Oil Week Ahead: China, BRICS, and PMIs

Key Events

Chinese Loan Prime Rates (Monday)
BRICS Summit (Tuesday – Thursday)
Flash Manufacturing and Services PMIs (France, Germany, Eurozone, UK, and US) (Thursday)
Geopolitical Tensions
Technical Analysis: Crude Oil

China: Weaker Economic Data

China's recent economic data shows further contraction, with CPI and PPI both declining, and GDP growth slowing to 4.7%, missing the 5.1% target. The government is expected to announce stimulus measures on Monday, which could influence the economic outlook and potentially revise global oil demand forecasts.

BRICS Summit: Geopolitical Shifts

The BRICS alliance (Brazil, Russia, India, China, South Africa), now including the UAE, Iran, and Ethiopia, with Saudi Arabia invited, is poised to create significant geopolitical shifts. Representing over 40% of global oil production and 29% of world GDP, BRICS decisions on energy transitions and a new monetary system independent of the US Dollar may cause short-term volatility in oil and currency markets. In the long term, their focus on renewable energy and a multi-polar financial system could stabilize and add bearish pressures on oil prices.

Geopolitical Conflicts: Supply Risks

Supply disruption fears have eased recently as geopolitical tensions shifted from oil facilities to military bases, reducing immediate risks to oil supply. However, ongoing conflicts continue to pose a background risk that could drive upside volatility in crude oil prices if circumstances change.

Flash PMIs: Economic Health Indicators

Beyond geopolitical risks and Chinese data, flash manufacturing and services PMIs for the Eurozone, US, and UK will be released on Thursday. These indicators will offer a clearer view of the economic health of these key regions and their potential impact on global oil demand.

Technical Analysis

Crude Oil Week Ahead: 3Day Time Frame – Log Scale

Source: Tradingview

Currently, oil prices are dominated by bearish sentiment, approaching the key support zone near 65. Historically, the 65-68 zone has been highly volatile, and with multiple influencing factors in play, this area will be critical in determining the next move for oil prices.

Bearish Scenario: A break below 68 could push oil prices down to the crucial support zone between 64-65. At this level, the market could enter a neutral phase, where either a bullish rebound occurs or the primary bearish downtrend, which began after the highs of 2022, continues.

Bullish Scenario: On the upside, with the 4-hour RSI in oversold territory, a rebound from the $68 zone could drive prices back up towards resistance levels at 71, 72, and 75 respectively.

--- Written by Razan Hilal – on X: @Rh_waves

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.