In the face of uncertainties on China’s cpvid situation, WTI misses to exceed $79.00.

In the face of uncertainties on China’s cpvid situation, WTI misses to exceed $79.00.

Market Analytics and Considerations

Key Notes

• Following a recovery move amid uncertainties caused by China’s Covid, oil prices have increased to nearly $79.00.
• In the midst of the holiday cheer, the US Dollar Index dropped to almost an intraday trough of 104.30.
• Traders are watching the official statistics on oil inventories in the United States for new indications.
• Around the outwards trendline around $79.50, the oil price is on the verge of breaking through.

After a stronger recovery, West Texas Intermediate (WTI), futures on the NYMEX, have hit close to $79.00 in the early European session. Prior to that, the price of crude oil had a reactive buying activity following a vertical decline to roughly $77.50. The Chinese government’s aggressive pace in reopening its economy is expected to boost oil consumption, but the issuance of certified oil stock levels from the Energy Information Administration (EIA) could increase volatility in the value of the crude oil

Russia forbids the G7 and the European Union from receiving oil

Vladimir Putin, the president of Russia, declared a suspension on oil supply to the G7 nations and the European Union following the declaration of a $60.00 per barrel price cap on oil supplies from Moscow. Owing to this, there is now a chance that supply will be less than need, which might contribute to an imbalance in the near future. To prevent Russia from financing weapons and ammunition for a war against Ukraine, Western nations imposed a price ceiling on the oil supply from that country. From February 1 until July 1, oil trades will be prohibited.

Investors are awaiting official oil stock data to determine their next move.

Markets are anticipating the publication of the United States Energy Information Administration’s oil inventory data for the week ended 31 December 23 for additional insight. The American Petroleum Institute (API) announced a reduction in oil stockpiles on Wednesday for the second consecutive week. The week before last, the oil inventories fell by 1.3 million barrels. Nonetheless, in order to arrive at a wise choice, traders will monitor government oil stock statistics. The oil stockpiles will decrease by 1.52 million barrels, according to the predictions.

Technical Perspective

The price of oil is circling some upward trendline drawn from the low point on December 12 at about $79.50. Traders should prepare for a significant move because the oil price is nearing a pivotal point. At $79.36, the 20- as well as 50-period Exponential Moving Averages (EMAs) produced a negative crossing, signaling a move to the downwards. The 200-period Exponential Moving Average (EMA) at $77.89, though, has not yet been given up.

The Relative Strength Index (RSI) (14) is now fluctuating over 40.00, but negative sentiment will start to build if it breaks within the bearish area of 20.00-40.00.

Key Technical parameters