During July, Crude Oil (CL) eased 5.18%. Since the highest level reached on July at $66.60 per barrel, the energy commodity shows a bearish sequence. In this post, we’ll analyse what to expect from Crude Oil for the coming weeks.
China cuts its imports from Iran
China reduced crude oil imports from Iran by more than 20% in June as reported by the Chinese Customs Agency on Saturday. The drop in imports from Iran plummeted from 208,205 barrels per day (BPD) in June 2018 to 163,000 BPD this year. The principal cause of this crash was the sanctions imposed by the United States on China’s imports of Iranian crude oil.
On the other hand, in the same period, crude oil exports from Iran plummeted more than 40%. Oil shipments fell from 3,806,000 BPD in June 2018 to 2,225,000 BPD.
Our technical overview
The Crude Oil (CL) daily chart shows a first drop starting in October 2018. This bearish sequence moved from $76.90 to $42.36; level touched on December 2019. The recovery drove CL to reach a lower high at $66.60 on April 23, from where continued a bearish movement.
The last bearish path, started on July 15, makes us expect a new decline. The 4-hour chart shows the first dip starts from $60.92 and found short-term support at $54.72. The last consolidation structure corresponds to a flag pattern. The breakdown could drive Crude Oil to visit June’s lows between $51.44 and $49.76. We don’t discard a more profound drop until $47.61. The invalidation level of the bearish scenario occurs if Crude Oil closes above $59.69.
Remember that the price is not forced to move as our outlook proposes. The charts released corresponds to an educational application of the Elliott Wave Theory. Comments issued don’t represent an investment recommendation. Leveraged products are complex financial instruments and are not recommended for a certain type of traders. Losses can exceed deposits.