OIL MIGHT BE GETTING INTO FURTHER SELL-OFFOil prices have continued to decline, marking the third consecutive session of losses. This decline is attributed to a series of sluggish economic data releases from Germany, the eurozone, and Britain, which have raised concerns about energy demand. Brent crude futures dropped by 2%, down $1.76 to $88.07 per barrel, while U.S. West Texas Intermediate crude futures fell by 2.2%, down $1.91 to $83.58 per barrel.
The eurozone's business activity data showed an unexpected downturn this month, raising fears of a potential recession in the region. Germany, one of Europe's economic powerhouses, appeared to be slipping into a recession, and Britain reported another monthly decline in economic activity, increasing concerns of a recession ahead of the Bank of England's interest rate decision. These economic uncertainties, along with other global factors, have contributed to the downward pressure on oil prices.
Despite the economic concerns in Europe, the U.S. recorded an uptick in business output in October, which helped boost the U.S. dollar, making dollar-denominated oil more expensive for holders of other currencies. Additionally, concerns surrounding the situation in the Middle East, where diplomatic efforts are underway to contain the Israel-Hamas conflict, have also impacted oil prices. Overall, the oil market remains on edge, with a focus on potential supply disruptions and geopolitical tensions.
If this trend continues, the price might reach levels of 81.53. In the opposite scenario, as a pivot point might be considered 86.38, from where the price might reach levels of 89.32.
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