Crude Oil nosedives after rumours Saudi Arabia is set to abandon price target

• Crude Oil is under pressure again, already down over 2.00% on Thursday.  
• Additional China stimulus is being offset by Saudi Arabia rumors and a ceasefire proposal on Lebanon. 
• The US Dollar Index holds steady ahead of a very volatile data calendar, with the Fed’s Powell speech in focus. 

Crude Oil nosedives for a second day and sees losses accelerate on Thursday in what seems to be a sharp correction. Nearly all gains booked on the China stimulus plan rollout and built-up tension in Lebanon are being offset by a ceasefire deal put on the table by the United States (US) and France during an emergency meeting at the United Nations (UN). An additional driver pushing Crude prices even lower on Thursday is the rumors that Saudi Arabia is set to give up its price target of $100 per barrel in light of the upcoming production normalization, the Financial Times reports. 

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, trades steady, just ahead of an expected very volatile trading day. On the economic data front, the third reading of the US Gross Domestic Product (GDP) for the second quarter and Durable Goods Orders data for August are due to be released. Add in there eight Federal Reserve (Fed) members that will take the stage, and volatility is bound to take place in the DXY later in the day. 

At the time of writing, Crude Oil (WTI) trades at $68.02 and Brent Crude at $71.35.

Oil news and market movers: Saudi Arabia gets in line with reality

• Saudi Arabia is preparing to abandon its unofficial price target of $100 a barrel for Crude as it prepares to increase output, the Financial Times reported on Thursday, citing people familiar with the matter.
• Signs that Libyan oil will return to the market are also weighing on prices after delegates from divided Libya's east and west agreed on the process of appointing a central bank governor. This is a step closer to resolving the crisis over control of the country's oil revenue, Reuters reports.
• The US, France, and several allies called for an immediate 21-day ceasefire across the Israel-Lebanon border while also expressing support for a ceasefire in Gaza following intense discussions at the United Nations, Bloomberg reports.
• Foreign Minister Israel Katz said there will be no ceasefire in the North, as Israel will continue to fight Hezbollah, Bloomberg reports. 

Oil Technical Analysis: Catalysts for profit taking

Crude Oil traders have not been able to enjoy their profits for a long time. Several counterarguments, such as the ceasefire deal that has been put on the table and now Saudi Arabia letting loose of its price target in Oil, are enough to completely unwind incurred gains that were reached on the back of the elevated tensions in the Middle East. Going forward, a further escalation in the MIddle East with a ground offensive might be enough to quickly push Crude back up to above $70.00. 

At current levels, $71.46 is back in focus as a first price cap on the upside after a brief false break. If positive momentum continues, a return to $75.27 (the January 12 high) could play out. Along the way towards that level, the 55-day Simple Moving Average (SMA) at $73.83 could ease the rally a bit. Once above $75.27, the first resistance to follow is $76.24, with the 100-day SMA in play. 

On the downside, $67.11, a triple bottom in the summer of 2023, should support any downturns.  Further down, the next level in line is $64.38, the low from March and May 2023.