U.S. West Texas Intermediate oil futures are trading lower for the week, putting the market in a position to post a potentially bearish technical closing price reversal top on the weekly chart. This chart pattern typically leads to the start of a two to three week correction.
Demand Concerns Move to Forefront
Traders are also responding to another downgrade of a major economic region as well as dovish remarks from the Reserve Bank of Australia.
In the U.S. on Thursday, the crude oil tumbled after White House economic advisor Larry Kudlow said that China and the U.S. were still far away on striking a trade deal. Later in the session, stock weakened further after CNBC reported that the Trump-Xi meeting before the March 2 deadline was “highly unlikely.”
Also contributing to this week’s sell-off are negative comments from the European Commission. The EC cut its forecasts for Euro Zone economic growth this year and next on expectations the bloc’s largest countries will be held back by global grade tensions and domestic challenges. The Commission said Euro Zone growth will slow to 1.3 percent this year from 1.9 percent in 2018, before rebounding in 2020 to 1.6 percent.
Early Friday, the Reserve Bank of Australia (RBA) may…