Oil hits new lows

After worrying Chinese export and import data came out, crude oil dropped to a new low in the current downtrend as seen in this weekly chart.

The long-term reasons are still the same. The OPEC couldn’t agree on a production cut as Saudi Arabia wants to fight competition from American shale producers. Chinese economic data showed again weaknesses and contributed directly to the new lows.

This oil downtrend started fine with a smooth movement. It then became swingy, and now turned to a more choppy behavior. It may be too late for the Zen trader to ride the oil dragon, unless you like bumpy rides.

However, the market may be tempted to break the lows from nearly seven years ago.

See here the monthly chart, which shows two smooth downtrends and only choppy upward moves. In the stock market it is generally the other way round.

Perhaps the shale production miracle and the retreating global economy prospects have changed the oil market more enduringly and we will see even a break of the 2002 lows soon.