Concerns around increased crude supply have kicked up, with renewed talk that OPEC+ will almost certainly adding back 180k barrels to its daily output rate in October.
While this news flow won’t necessarily surprise too many in the oil market, it has collided with a deterioration in China’s manufacturing PMIs (to 49.1 from 49.5) and further evidence of slower growth in China, where Chinese authorities are clearly increasing their concern levels.
Front-month crude futures are heavy at the start of the week and have broken Friday’s low of $73.36 and with momentum skewed to the downside, it feels as though price runs the real risk of revisiting the multi-month range lows between $72.48 to $71.46.
Clearly, US data would be the trigger to see price test and potentially even break this key support area, where crude traders will not hesitate to push price potentially into a new range on a weaker US ISM manufacturing and nonfarm payrolls print – bad news on the economic front is absolutely bad news for the crude market.
