Oil Tests 200-day Average Again.

According to CME Group’s flash data for crude oil futures markets, traders expanded on the prior build on Friday by adding almost 6,500 contracts to their open interest holdings. As a result, volume resumed moving upward and increased significantly by about 148.000 contracts.

The current decline to the 200-day average will be the fourth test of that significant support. Since the rallies off the 200DMA have been very shallow, we might expect the price to break below the support.

In that scenario, the price could continue lower, targeting July’s lows at 90.50 USD, with a possible further decline to 88.60 USD.

On the other hand, if bulls re-defend the 200DMA, a short-term rally toward 98 USD could occur. However, the medium-term trend seems bearish, mainly amid the fears of a global recession.

PMI Data in Focus

Later today, the final S&P Global Manufacturing PMI and the more critical ISM Manufacturing will also be on the economic calendar, followed by June’s Construction Spending statistics.

Earlier, according to government data released on Sunday, industry activity in China decreased in July despite a new wave of COVID-related lockdowns. As a result, the purchasing managers’ index (PMI) fell from 50.2 in June to 49.0 in July. A contraction is indicated by a value below 50.

The Organization of Petroleum Exporting Countries and Allies (OPEC+), which will meet on Wednesday, August 3, to talk about future supplies, is now in the spotlight. According to reports, the company is expected to either maintain existing production levels or slightly increase them.