Crude Recovery Continues… For Now

Crude BouncingCrude oil prices are rising today and are on course to post their fourth consecutive session in the green. However, the recovery looks tepid and bullish momentum looks weak against the scale of the declines we’ve seen in recent months. Crude futures are down almost 30% from the YTD highs and look vulnerable to further losses from current levels.OPEC UncertaintyMore recently, the sell-off in oil has been driven by oversupply concerns. Despite OPEC+ announcing that it would extend current production restrictions through to Q1 next year, division within the group and a break from typical procedure (member states will announce their own cut levels instead of adhering to a group-wide quote) has seemingly reduced the impact of the news.US CPI in FocusWith US production still at highs and concerns over the health of the Chinese economy taking centre stage, near-term demand prospects look shaky. Looking ahead this week, crude traders will also be watching USD on the back of tomorrow’s CPI reading. Further downside should help crude recover further, weighing on the Dollar. However, any fresh upside should see a fresh downturn in crude with USD likely to trade higher through the week.Technical ViewsCrudeThe sell off in crude has seen the market breaking down below the 72.61 level. While below here and with momentum studies bearish, the focus is on a continuation lower and a test of 66.79 next. To the topside, bulls need to see a break of the channel highs in order to alleviate downside focus.