Crude Oil seems to be struggling to break out of a bearish trend, as the crude prices saw choppy trade last week. Crude prices after entering a downfall, pared back its losses. But the prices are unable to climb up to form a clear uptrend, due to global demand concerns for Crude oil.

Last week on Thursday, Crude oil prices dropped by 2.08% for the 24 hour period ending 23:00GMT to $105.19. Later on Friday, the Light Sweet Crude Oil (WTI) futures for September delivery, one of the most actively traded contracts, fell by 0.8% to close at $104.70 a barrel on the New York Mercantile Exchange.

The Chinese economic data released last week provided a grim outlook for economic growth in the World’s second largest Oil consumer. China’s manufacturing data plunged to 11-month trough in July, with deteriorating prospects for its job market. This caused concerns about a possible slump in the demand growth for oil consumption from the Asian giant.

The US consumer sentiment had increased to its best in past six years. But, the global demand concern for Crude oil offset the positive effect from this upbeat economic data from the US. Still, the positive US data provided a support for the falling Crude prices and capped its losses.

At the start of this week, on Monday, the WTI Crude oil futures for the September delivery inched up by $0.21 to trade at $104.91 a barrel. But, on Tuesday, WTI Crude for September delivery declined by as much as $1.10 to $103.45, its lowest point since July 9. While the Brent Crude, the international benchmark for crude oil, slipped by 0.5% to $106.92 a barrel.

On Wednesday this week, the Brent Crude for September delivery continued to post slight losses as it declined by 80 cents to trade at $106 per barrel. The WTI crude on the other hand, slightly climbed up by $1.95 to settle at $105.03, to post a 9% overall increase for the month of July.

Starting this week the US dollar was on a downtrend as it slumped against the major currencies like the Euro and the Japanese Yen. This slightly pushed up crude oil prices as a Dollar decline to some extent helps in increasing the purchasing power of other currency holders. This marginally increased the demand outlook for Crude oil. Also, the EIA reported a plunge in the US stockpiles of oil that increased the demand outlook for US oil.

Moreover, Saudi Arabia has decided to stop its plans for increasing the production capacity of its oil fields on a bearish demand outlook. This coupled with the festering tensions in the Egypt and Libya caused supply concerns for Crude oil. This helped Crude prices to trade slightly higher compared to its last week slump.   

Then again on Wednesday, a Reuters poll revealed that Chinese manufacturing sector has shirked in its growth for the month of July. Also, according to the Bloomberg News survey US GDP has increased less than expected. The US GDP grew at a 1 percent annualized rate for the months from April to June against a 1.8% expansion in the previous three months. This signals at a possible slowdown in US economy. This weighed down on the Crude oil prices.

However, the major crude oil suppliers are planning to cut back their production and the concerns about a possible disruption in supply from Egypt and Libya are also mounting up. This will probably help Crude oil break its jittery movements and start a clear uptrend if its backed by some positive economic data from US or China.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.