WEST Texas Intermediate (WTI) oil price edged lower on Aug 13, breaking a four-day streak of gains, as markets refocused on concerns about oil demand following the Organization of the Petroleum Exporting Countries’ cut in its forecast for demand growth, the first since July 2023. This reduction comes amid mounting signs that demand in China has lagged expectations due to slumping diesel consumption and ongoing crises in the property sector that continue to impact the world’s second-largest economy.
From a technical perspective, WTI oil price is likely to show weakness going forward. Its long-term trend exhibits weakness as the price has continued to form lower swing highs along a downward resistance line since September 2023. Although the price recently found support at a double bottom of US$72.50 per barrel in early August, it has faced resistance near the US$80 per barrel level, which was a prior range consolidation support from June to July before a breakdown occurred.
Furthermore, the Moving Average Convergence Divergence technical indicator has also been displaying a series of lower highs and lower lows since April this year, which suggests decreasing momentum that is confluent with WTI’s longer-term price weakness.
Moving forward, WTI oil price is expected to extend its long-term downtrend and bearish outlook.
The writer is research analyst at Phillip Securities Research
