On Tuesday (July 16th) during the European trading session, WTI crude oil futures plummeted due to concerns about global demand outweighing expectations of a possible interest rate cut by the Federal Reserve. The market is preparing to test last week's low point, and $80 will become a key psychological target.

Federal Reserve Outlook

Recent statements by Federal Reserve Chairman Powell indicate a growing confidence in inflation returning to the Fed's target. Market participants interpret this as a signal that the Federal Reserve may be about to cut interest rates, possibly as early as September. Lower interest rates can stimulate economic activity and oil demand by reducing borrowing costs.

OPEC+and Geopolitical Factors

Despite OPEC+restrictions on supply and ongoing tensions in the Middle East, oil prices still face pressure. Brent crude oil futures closed at $84.85 per barrel on Monday, while West Texas Intermediate (WTI) crude oil in the United States closed at $81.91 per barrel.

Refinery activities and imports

China's refining production in June decreased by 3.7% year-on-year, marking the third consecutive month of decline. Planned maintenance, lower processing profit margins, and weak fuel demand have led to reduced production in independent factories. This trend, coupled with a decrease in crude oil imports, has intensified bearish sentiment.

The political landscape of the United States

The market is also considering recent political developments in the United States. The assassination attempt against former President Trump has attracted attention, and some analysts say it may increase his chances of re-election. This adds another layer of uncertainty to the market outlook.

market prediction

The short-term outlook for oil prices seems bearish, as WTI crude oil may be limited to below $85 per barrel. The weak macroeconomic data in the United States, especially the upcoming retail sales data for June, may further suppress oil demand.

Traders should closely monitor economic indicators of major Eastern countries, data released by the United States, and political developments in the coming weeks to find potential price catalysts. The interaction between global economic concerns and geopolitical factors may drive market volatility in the short term.

technical analysis

WTI crude oil futures came under pressure on Tuesday, falling near last week's low of $80.81. The downward trend indicates that this may lead to a further drop in crude oil prices to $80.18, slightly above the psychological support level of $80.00.

If it fails at $80.00, it may trigger an acceleration into a support cluster consisting of a short-term 50% level of $72.16 and a 50 day moving average of $79.06. After testing this value area, we look forward to buyers reappearing.