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Oil drops on risk aversion, Brent down 2%

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Oil prices at both the sides of the Atlantic fell in the US session as the China-led risk aversion eventually weighed over prices.

    At the time of writing, Brent futures were down 2% at $ 40/barrel levels. WTI futures were down 2.61% at $36.90/barrel.

    Brent prices clocked a high of $41.46 in the early US session on talks of production freeze/cut by major producers. However, China-led risk-off in the European and US equities eventually pushed oil into losses.

    Moreover, a sharp drop in China’s exports and imports stoked fears about the possibility of a drop in China’s oil demand and the resulting delay in supply-demand match. Traders now await US American Petroleum Institute inventory data.

    Brent Technical Levels

    The immediate support is seen at 39.38 (Dec 15 high), under which prices could drift lower to 38.96 (Jan 4 high) – 38.82 (100-DMA). On the other hand, a break above 40.78 (50% of Aug 31 high-Jan low) could see prices re-test the daily high of $41.46.
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