(Bloomberg) -- Oil retreated to the lowest in almost two months as the outlook for demand in China remained gloomy while traders looked ahead to key data points.
West Texas Intermediate settled below $75 a barrel at the lowest closing price since June 5. Technical measures including the relative strength index are signaling that the selloff may be overdone after trend-following algorithms exacerbated losses in recent sessions.
Meanwhile, the outlook for crude demand remains shaky as banks including Citigroup Inc. reduce growth forecasts for Asia’s biggest economy and export prices of US oil heading to the region weaken. China’s second-half imports are also expected to be muted.
Key market data points remain this week, including US inventory data on Wednesday that may gauge the strength of the country’s summer driving season. On Thursday, OPEC+ will hold a monitoring meeting. The market is split on whether the alliance will proceed with a scheduled output increase next quarter.
Meanwhile, the Federal Reserve releases an interest rate decision on Wednesday, with markets expecting the US central bank is getting closer to lowering borrowing costs.
Oil’s recent slide has been compounded by trend-following technical traders. Money managers slashed net-bullish wagers last week and have the smallest position in gasoline — a key driver of oil demand growth — in four years.
To get Bloomberg’s Energy Daily newsletter into your inbox, click here.
©2024 Bloomberg L.P.
