Oil down 4% on the day as downside pressure persists

The ongoing worries surrounding global growth isn’t really helping the mood in oil at the moment and we’re taking quite a shave off the top after the spike towards $130 amid the Russian invasion of Ukraine in early March.

The uneasy situation surrounding Shanghai isn’t helping with the outlook as China remains a major uncertainty at this stage. The technicals point to some support around $95 and the 15 March low at $93.56 but a drop below that is where things could get uglier for oil, despite a 4% decline to start the new week already.

There won’t be much support towards $90 next before the 100-day moving average (red line) @ $88.51 currently comes into play.

I outlined my thoughts on the oil market in this post last week. I still stand by the more bullish structural view with dip buys around $80 to $85 being where the value is at, barring major demand destruction.