Market Analytics and Considerations

 

Key Notes

 

• After failing to continue their comeback to close to $80.00, price of oil has since turned sideways.
• Despite the US government’s suspension of oil shipments to China, the price of oil hasn’t lost its momentum.
• Declining US inflation significantly increased the likelihood that the Fed’s policy strengthening would ease.

 

West Texas Intermediate (WTI) futures on the NYMEX have noticed a weakness in their upward movement near the important threshold of $80.00. Although profit-taking has made it difficult for the crude prices to prolong its surge over $79.40, the bullish tendency is still strong.

 

The Chinese economy has chosen the route of rehabilitation after being in a long-term shutdown to support shutdown restrictions to stop but the farther spread of the Covid-19 outbreak, which has caused the oil price to keep rising over the previous week. Following the removal of limitations on the mobility of persons, goods, and machines as well as the acceptance of foreign visitors, China is taking steps to restart its economy, which will accelerate future economic development.

 

The possibilities of additional rebound in oil consumption ahead have increased as a result of a recent downturn in US inflation numbers driven by a reduction in petrol and used car prices. Figures reported on Thursday in the US indicated a deceleration in inflation, with the yearly CPI rate dropping below 6.5%, the lowest number until October 2021, as according Bill Diviney, Sr. Economist at ABN – AMRO. Additionally, declining inflation allows the Federal Reserve to raise interest rates by 25 basis points as opposed to 50 bps.

 

Given that the US government is stopping the flow of oil to China from its Strategic Petroleum Reserve, the price of crude is most likely to rise further (SPR). Throughout this case, the Chinese government would be obligated to hunt for enhanced oil sources to meet their increasing demands, which may cause near-term problems for such supply of oil but it will increase oil prices.

 

Key Technical levels to monitor

 

OVERVIEW
Today last price	78.44
Today Daily Change	-0.04
Today Daily Change %	-0.05
Today daily open	78.48

 

TRENDS
Daily SMA20	77.26
Daily SMA50	79.08
Daily SMA100	82.44
Daily SMA200	92.55

 

LEVELS
Previous Daily High	79.35
Previous Daily Low	77.32
Previous Weekly High	81.56
Previous Weekly Low	72.64
Previous Monthly High	83.3
Previous Monthly Low	70.27
Daily Fibonacci 38.2%	78.57
Daily Fibonacci 61.8%	78.09
Daily Pivot Point S1	77.42
Daily Pivot Point S2	76.35
Daily Pivot Point S3	75.39
Daily Pivot Point R1	79.45
Daily Pivot Point R2	80.41
Daily Pivot Point R3	81.48