U.S. crude has continued its losing ways at the start of the week and is down for a sixth successive day. Currently, crude is trading at $58.34, down $0.84 or 1.35%. Brent crude is trading at $64.28, down $0.72 or 1.11%.
Crude Briefly Drops Below $58
It was a rough week for U.S. crude, which fell 6.2% last week, its biggest one-week decline since July. The downturn has continued on Monday, with crude touching a low of $57.98, its lowest level since December 6th.
Investor risk appetite has made a fast recovery after the recent showdown between the U.S. and Iran raised fears of war in the Middle East and sent crude above $65 per barrel. However, Iran and the United States both stepped down and tensions have significantly eased. With no immediate danger to crude production or supply routes, oil prices have taken a tumble since last week.
U.S Nonfarm Payrolls Slide
The U.S. labor market has been a driving force in the success of the U.S. economy, but December employment numbers, released on Friday, were a major disappointment. Nonfarm payrolls dropped sharply to 145 thousand, compared to 266 thousand a month earlier. This missed the estimate of 162 thousand. Wage growth fell by 0.1% to 2.9%, its lowest level since July 2018. The unemployment rate remained unchanged at 3.5 percent.
Despite all the talk about a ‘tight’ labor market, weaker real wages will likely translate into reduced consumer spending, which could spell trouble for economic growth in 2020 and weigh on oil prices.
WTI/USD is on a downward trend. There is support at 58.00, followed by support at 57.25. On the upside, there is weak resistance at 58.75. The 50-EMA line is close by, at 59.09. This is followed by resistance at the round number of 60.00.
This article was originally posted on FX Empire
More From FXEMPIRE:
- GBP/JPY Price Forecast – British Pound Sideways Against Yen
- E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 9053.25, Weakens Under 8966.25
- Crude Oil is Slowly Falling
- Price of Gold Fundamental Daily Forecast – Prices Likely to Weaken as Investors Seek Value
- Natural Gas Price Prediction – Prices Slide but Weather is Turning Colder
- Crude Oil Price Forecast – Crude Gets Hit Again With Lowering Tensions