Market Analytics and Technical Considerations
Brent crude is focused on updates about the Russian oil price cap.
USD is constrained by FOMC minutes over the holiday.
As COVID cases reached unprecedented highs in China, the demand for crude oil weakened.
September swing bottom is once again under strain.
The fundamental background of Brent crude oil
Due to reports of the G-7 recommendation to raise the Russian oil price cap from approximately $60 to $65–$70, Brent crude oil prices are somewhat higher on Wednesday, while they are still quite low today at 77.96. This means that if a revised price range is settled upon, Russia will be less likely to cut off supplies at these levels than it would be at $60. This is due to the price at which Urals (Russian crude oil) has been trading in relation to Brent crude. Despite this, the member countries did not reach a consensus; the conversation is scheduled to resume today.
Additionally, one of the main goals of the price restriction is to financially disadvantage Russia; as a result, the Russians will likely have little to no impact from it, reflecting the EU’s inclination for supply stability.
Last evening, EIA weekly inventory statistics followed the previous API data release, with stocks changing more than anticipated to 3.69MMbbls while failing to influence Brent rates.
The USD has been weakening all day today as well, which highlights the significance of the price cap data and underscores the decline in Brent all the more serious. Yesterday saw the release of a flood of economic data for the United States, including positive surprises for durable goods orders and consumer confidence.
However, initial unemployment claims above expectations, while PMI data missed on all parameters. The eagerly awaited FOMC minutes partly let everyone down because they contained no brand-new material and instead reiterated the need for gradual interest rate increases, which led to a decline in the value of the dollar.
Due to the Thanksgiving holiday, there will be no U.S.-focused economic data for the remainder of the week, so volatility may remain low unless there is further clarity regarding the Russian oil price cap and potential OPEC member statements addressing the speculated increase in production relatively early in the week.
Requirement analysis shows that China’s COVID infections have touched record amounts today, depressing projections for the main consumer of crude oil until the virus can be managed, enabling for less severe restrictions.
The daily Brent crude chart’s price movement indicates the escalating obstacles. There is potential for more price fall, but it will rely on how OPEC+ performs the week after next in addition to how the Russian oil limit is clarified.
Key resistance levels:
$90.00
$87.28
Key support levels:
$83.51
$82.38
With 86percent of traders presently owning long positions, retail traders are NET LONG on crude oil.We normally take the opposite stance from the public, but recent shifts in long and short positions have led us to adopt a short-term bearish inclination.
