Crude Oil Updates by Solid ECN

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Crude Oil - growth ahead of OPEC+ meeting​

Quotes of Brent Crude Oil are trading around 95, and the asset's volatility is very high ahead of the meeting of representatives of the Organization of the Petroleum Exporting Countries.

Last week, the key event was the decision of the G7 countries to introduce new restrictions on the supply of Russian oil: it is supposed to set a price ceiling for raw materials and prohibit the insurance of ships transporting them at a higher cost. Deputy Chairman of the Russian government, Alexander Novak, has already stated that official Moscow will not sell energy resources to those states that use non-market pricing schemes and intends to reorient itself to other regions. Thus, this decision will have almost no effect on the volume of exports of Russian oil in the world, and pressure on energy prices will be minimal.

Today at 12:00 (GMT+2), the leaders of the OPEC+ countries will discuss the parameters for implementing the oil production agreement for the period from October to the end of this year. According to preliminary information, the cartel intends to maintain the current agreements on a gradual increase in production by 100K barrels per day, which is another positive factor for the market. At least Deputy Prime Minister of the Russian Federation Alexander Novak and Minister of Energy of Saudi Arabia Prince Abdulaziz bin Salman have already spoken about this.



On the daily chart of the asset, the trading instrument is moving within a downward correction to the global uptrend, and after reaching the July low at 91.00, it is reversing upwards. Technical indicators slowed the decline: indicator Alligator's EMA oscillation range began to narrow, and the histogram of the AO oscillator was close to the transition level.

Resistance levels: 97.26, 103.5 | Support levels: 91.48, 85.6​

 

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Crude Oil - The market is waiting for India's decision on the introduction of a cap on oil prices from the Russian Federation

Brent Crude Oil is correcting slightly above 88 after losing significantly yesterday amid forecasts from the Energy Information Administration of the US Department of Energy (EIA), as well as due to India's possible entry into the ceiling level discussion of the oil price.

As Deputy Secretary of the Treasury Wally Adeyemo told Bloomberg, the Indian authorities are currently studying the initiative of the G7 members, which, also to limited pricing, involves a ban on the insurance of ships transporting Russian oil at a higher cost. Investors fear that if restrictions are approved by the key buyer of oil from the Russian Federation, the demand for resources may decrease significantly, which will undoubtedly affect the price. We also recall yesterday's statement by Russian President Vladimir Putin, who stressed that no oil would be supplied to countries that supported the decision to introduce a marginal cost level.

On the daily chart, the price is moving within a downwards corridor, gradually approaching the support line. Technical indicators maintain a stable sell signal: fast EMAs of the Alligator indicator are moving away from the signal line, and the AO oscillator histogram is forming down bars in the sell zone.

Resistance levels: 91.53, 98.82 | Support levels: 86.85, 79.95​

 

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Crude Oil - US strategic oil stock hits 1984 low​

The dynamics of the asset are affected by the continued release of oil from US reserve storage facilities. As noted in The Wall Street Journal, energy stocks fell last week to a minimum since 1984, reaching 427.0M barrels, and fell below commercial reserves held by US firms, which raises fears of experts ahead of the entry into force of the ban. for the import of Russian "black gold" by the EU countries from December 5. According to preliminary estimates, the market may lose up to 1.0M barrels per day, which will lead to a sharp increase in prices and have nothing to compensate for.

Despite the fall in quotations, the demand for contracts from investors continues to rise for the third week, reaching a value of 239.9K against 227.1K a week earlier. Such values were last recorded in 2016, during the first serious decline in oil prices to levels around 30 – 40 dollars per barrel, and at the current level of demand, there is no increase in asset quotes expected.

On the daily chart of the asset, the price is moving within a downwards corridor, declining towards the support line. Technical indicators maintain a sell signal: fast EMAs of the Alligator indicator are below the signal line and move away from it, and the AO oscillator histogram forms downward bars in the sell zone.

Resistance levels: 85.5, 92 | Support levels: 82.4, 76.8​

 

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Crude Oil - "black gold" remains under pressure​

Pressure on quotes is exerted by growing fears of a global recession, which are confirmed in macroeconomic publications and comments by official representatives of monetary regulators. In addition, investors are concerned about possible disruptions in oil supplies from Russia, as the country is under sanctions pressure, and the geopolitical risks associated with the escalation of the military conflict in Ukraine are only intensifying. Finally, the fact of the continued release of the energy carrier from the US reserve storage facilities contributes to the decline in "black gold", which leads to a short-term increase in supply on the market. Inventories fell to a 1984 low last week to 427.0 million barrels, according to The Wall Street Journal. In addition, on Monday, the Organization for Economic Cooperation and Development lowered its forecasts for global economic growth: this year it may still be 3.0%, but next year it will drop to 2.2% instead of the 2.8% previously expected.

The American Petroleum Institute (API) report released the day before pointed to an increase in reserves by 4.15 million barrels. For the last reporting week, the report showed an increase in the indicator by 1.035 million barrels. Today, investors are waiting for the publication of similar data from the Energy Information Administration of the US Department of Energy (EIA).

On the daily chart, Bollinger Bands are steadily declining. The price range expands from below, making way for new local lows for the "bears". MACD is preserving a weak sell signal (located below the signal line). Stochastic, having reached the zero level, reversed into the horizontal plane, indicating risks of the oversold instrument in the ultra-short term.

Resistance levels: 78, 79.24, 81, 83 | Support levels: 76, 74, 73, 72​

 

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Crude Oil - Markets fear restrictions on oil imports from Russia​

The quotes moved to corrective growth after it became known that the European authorities are intending to return to the issue of setting a maximum price level for the oil supply from Russia. Initially, such an initiative was not supported by all the states of the EU (Hungary and Cyprus were opposed), but yesterday, the head of the European Commission, Ursula von der Leyen, said that restrictions could appear in the new, already eighth package of sanctions against the Russian economy. The European Union also intends to limit the import of products to up to 7B euros and prohibit EU citizens from entering the management bodies of Russian companies, which is now quite common. Thus, investors fear that by December, the region will experience not only a shortage of gas, the supply of which has practically ceased after reports of the destruction of three pipelines of the Nord Stream system near the Danish island of Bornholm but also oil due to a "mirror" response to the introduction of sanctions by official Moscow.

On the daily chart, the price is moving within a downwards corridor, falling towards the support line. Technical indicators maintain a sell signal: fast EMAs of the Alligator indicator are below the signal line, and the AO oscillator histogram forms downward bars in the sell zone.

Resistance levels: 89.68, 97.1 | Support levels: 82.54, 76.2​

 

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Crude Oil - Waiting for the OPEC+ meeting​

Over the past few months, the oil market has been under serious pressure due to growing signs of a slowdown in the global economy and the strengthening of the US dollar, supported by the actions of the US financial regulator to tighten monetary policy. To stabilize prices in the current environment, leading exporters may go for another reduction in production, the most significant since the beginning of the coronavirus pandemic.

The next summit of the OPEC+ cartel and its allies will take place on Wednesday, and, according to sources within the organization, it may decide to reduce the production of “black gold” by 1 million barrels per day or even more. It is worth noting that already now exporters cannot fully carry out the established production quotas due to a lack of investment or sanctions pressure on the industry. Experts believe that a change in existing plans may lead to a momentary increase in oil prices, but the general market downward trend will continue, as the risks of a recession in the global economy will continue to grow.

The price is close to the level of 90 (the center line of Bollinger Bands), a breakout of which will give the prospect of further growth of quotations to the levels of 93.5 (Murray [7/8], Fibonacci retracement of 61.8%), 96.4 (upper line of Bollinger Bands). The key point for the "bears" seems to be 87.5 (Murray [5/8]), consolidation below which may lead to a decline to the area of 81.25 (Murray [5/8]), 75.00 (Murray [4/8]).

Resistance levels: 90, 93.5, 96.4 | Support levels: 87.5, 81.25, 75​

 

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Crude Oil - Upward correction ahead of the OPEC+ meeting​

According to sources within the organization, during the meeting, a decision may be made to reduce the production of "black gold" by 1 million barrels to stabilize prices. Larger production adjustments than previously expected will be an indicator of producers' concern about the rapid slowdown in the global economy in the face of active tightening of monetary policy by leading central banks. A number of experts believe that a consistent increase in interest rates carries the risk of a contraction in the economy in the future. These fears led to the most rapid drop in oil prices since the start of the coronavirus pandemic in early 2020, forcing OPEC+ to think about ways to stabilize the market. Any move by the cartel to raise prices could put additional pressure on Western consumers, who are under unprecedented pressure amid the energy crisis.

An additional factor contributing to the strengthening of the Brent Crude Oil rate remains the disruption of energy supplies to Europe. The International Energy Agency (IEA) has estimated that gas consumption in the countries of the region will decrease by 10% this year alone, outstripping the indicators of the largest economic crisis in 2009 and the COVID-19 pandemic in 2020. Of course, fuel shortages, as well as a complete restructuring of supply chains, will put pressure on oil prices for a long time. Against this background, one can assume that in the long term the quotes of the trading instrument will correct to the level of 95.50, in the area of which the further direction of quotes will be determined.

The long-term trend is downward, but at the moment a correction is developing with the target at 95.5. If the "bears" hold this level, the decline will continue to the area of 89. Otherwise, growth to 104 can be expected.

The midterm trend remains downtrend. Now the price is moving towards the key resistance at 92.77–91.92, after the test of which it is worth considering new short positions with a target at the September low of 83.50. If the resistance of 92.77–91.92 is broken upwards, then the trend will change to an upward one, and in this case, it is worth moving on to looking for long positions with the target of 101.27–100.42.

Resistance levels: 95.5, 104 | Support levels: 88, 83.5​

 

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Crude Oil Technical Outlook​

Crude oil price trades negatively to press on 89.75 level, to hint heading to decline on the intraday basis, targeting testing 88.2 initially, noting that breaking this level will extend the bearish wave towards 86.65 as a next negative target.

Therefore, the bearish bias will be suggested for today, noting that breaching 90.6 will stop the current negative pressure and lead the price to resume the bullish wave that its next main target located at 93.17. The expected trading range for today is between 88 support and 91 resistances.

The expected trend for today: Bearish​

 

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Crude oil price approaches the extended target​

Crude oil price shows positive trades to approach testing the key resistance 88.65, which represents one of the next trend keys besides 86.65 support line, as the price needs to surpass one of these levels to detect its destination clearly, which makes us continue with our neutrality until now.

To review the details of the expected targets of the beach, the expected trading range for today is between 85.50 support and 89.50 resistance. The expected trend for today: Neutral​

 

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Crude Oil - Upward Momentum may Continue​

Benchmark Brent Crude Oil is correcting to trade just above 91 after OPEC+ decided to cut production by 2.0M barrels per day.

The cartel's actions caused a lot of discussion from Western countries, but the organization's secretary general, Haitham al-Ghais, said that this deal was not a political decision but was dictated solely by the balance of supply and demand. In his opinion, the situation on the market may change significantly soon, and the cartel needs to react now. According to other officials, these measures are dictated by a ban on importing oil and petroleum products from Russia to the EU, which will come into force on December 5.

On the daily chart of the asset, the price is moving within a downwards corridor near the resistance line.

Resistance levels: 93.86, 99 | Support levels: 88.80, 82.37​

 

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Crude Oil - US inventory growth puts pressure on oil quotes​

The long-term trend is downward. The key resistance level is located at 93.5, and the key support is around 76.50. Last week, buyers unsuccessfully tried to break out the 86.5 mark, therefore, we can assume a decline in prices to the nearest support level of 81.

The mid-term trend remains upward. Last week, market participants tried to break the key trend support in the area of 86.21–85.46. The trading week closed inside the range, which indicates the retention of support. The trend target is the October maximum in the area of target zone 2 (94.27–93.43). Consequently, it will be possible to consider oil purchases when the first signs of an upward movement appear from approximately the current levels.

Resistance levels: 86.5, 89.5, 93.5 | Support levels: 81, 76.5​

 

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Crude Oil - US fears Russia's complete refusal to import oil​

Quotes are growing against the backdrop of new information from the United States about the possible introduction of a price limit for imported from the Russian Federation oil. After negotiations with the parties to the agreement, the American authorities decided to soften their position, and the value was changed from 50.0 dollars per barrel to 60.0 dollars per barrel, which was supported by the G7 countries, Australia and South Korea. US Treasury Secretary Janet Yellen explained the decision by saying that if the price is too low, Russia can completely abandon imports.

On the daily chart of the asset, the price is moving within the downwards corridor, coming close to the resistance line.

Resistance levels: 97.6, 103.5 | Support levels: 89.8, 82.5​

 

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Oil price forecast​

Oil short-term uptrend continued. The high of October 27 was broken through. Oil traders tried to break out the upper Target Zone 89.51 – 88.76, but failed. The oil price is now being corrected down with a potential target to test Additional Zone 87.80 – 87.61. After the AZ zone test, I suggest entering new purchases according to the pattern with a target at yesterday’s high.

If the price breaks out the Additional Zone downside within the correction, the oil price should reach the Intermediary Zone 85.92 – 85.55, which is the border of the short-term uptrend. In this scenario, one could also enter purchases after the price reaches the IZ.

US Crude trading ideas for today:

• Buy according to the pattern in Additional Zone 87.80 - 87.61. Take Profit: 89.61 - Stop Loss: according to the pattern rules.
• Buy according to the pattern in Intermediary Zone 85.92 - 85.55. Take Profit: 89.61 - Stop Loss: according to the pattern rules.

 

[SOLIDECN]

US Crude Oil​

Yesterday, the oil traders were testing the Additional Zone 90.2 – 90.01. The zone was held up, and the price reached the Gold Zone 92.88 – 92.51, the trend resistance. The oil traders also tried to break this zone upside, but failed.

The price is now trading in the correction and testing the new Additional Zone 91.03 – 90.85. The AZ is the strong support level, where one could enter new purchases according to the pattern with a target at yesterday’s high.

If the AZ is broken out, the correction will continue down to the Intermediary Zone 89.16 – 88.78.

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• Buy Zone 91.03 - 90.85 | Take Profit: 92.88 | Stop Loss: according to the pattern rules.​
• Buy Intermediary Zone 89.16 - 88.78 | Take Profit: 92.88 | Stop Loss: according to the pattern rules.​

 

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Crude Oil - A fall is possible.

On the daily chart, a downward correction forms as the second wave of the higher level 2, within which the wave c of 2 develops. Now, the third wave of the lower level (iii) of c has formed, a local correction has ended as the fourth wave (iv) c and the development of the fifth wave (v) of c has started.

If the assumption is correct, the price of the asset will fall to the area of 77.50 – 62.55. In this scenario, critical stop loss level is 100.87.

 

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Crude Oil Price Suffers Strong Losses

Crude oil price ended last Friday with strong negativity to settle at 76.05 level, starting today with additional strong decline to break the mentioned level and reach 74 areas now, which pushes the price to suffer more expected losses in the upcoming period, opening the way to head towards 72.60 areas as a next main station.

Therefore, the bearish bias will be expected for today, supported by the negative pressure formed by the EMA50, taking into consideration that breaching 76.05 will stop the suggested decline and lead the price to attempt to recover again.

The expected trading range for today is between 72 support and 75.7 resistance, and the expected trend for today is Bearish.​

 

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Crude Oil - EU countries again did not agree on the maximum price level for oil from Russia

Representatives of the EU countries could not agree on the limitation of prices for Russian oil. According to one of the diplomats, the reason was the position of the representatives of the Polish delegation, which again refused to agree, demanding a significant reduction in the price ceiling from the current offer of 65.0–70.0 dollars per barrel since now this limit does not hinder exports in any way and will not significantly pressure on the Russian budget. Also, according to yesterday's data, the cost of a barrel of Urals oil was 51.96 dollars. As for the deal itself, the market has less and less confidence that all participating countries will finally accept it in the EU before December 5, when the restrictions provided for by the eighth package of sanctions, including the embargo on the supply of "black gold" from the Russian Federation by sea, will come into force.

On the daily chart of the asset, the trading instrument is moving within the downward corridor, approaching the resistance line, and the technical indicators maintain a stable sell signal, which does not rule out a local correction.

Resistance levels: 88.20, 95 | Support levels: 82.80, 77.5​

 

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Crude Oil - Trades near the year’s low

The key factor determining the direction of dynamics in the oil market remains the discussion of the maximum price level for Russian oil, which has not yet been agreed upon. Despite additional negotiations and consultations, the Baltic countries and Poland strongly oppose the introduction of a limit of 65.0–70.0 dollars per barrel, insisting on a range of 30.0–40.0 dollars per barrel. The desire of the leading European countries to set a limit is natural since, despite public statements about the refusal to purchase Russian energy resources, it is virtually impossible to do without them, and the high cost will allow them to hope that official Moscow will continue to supply energy resources further. However, yesterday, Deputy Prime Minister of the Russian Federation Alexander Novak denied this assumption, saying that the government would stop cooperating with countries that supported the new pricing mechanism and intended to work only on market conditions while not ruling out a possible reduction in oil production if the offer exceeded demand. The head of the International Energy Agency, Fatih Birol, also pointed to the fall in oil production in Russia and suggested that in the first quarter of 2023 it could reach –2.0M barrels per day.



On the daily chart of the asset, the instrument is moving around the year’s low of 76.00, slightly correcting upwards, and the technical indicators confirm the likelihood of a local correction, weakening the sell signal.

Resistance levels: 81, 86.6 | Support levels: 77.35, 73.65​

 

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Crude Oil - A fall is possible.

On the daily chart, a downward correction forms as the second wave of the higher level 2, within which the wave c of 2 develops. Now, the development of the fifth wave (v) of c has started, the wave i of (v) is developing, and the local correction is forming as the wave ii of (v).

If the assumption is correct, the price of the asset will fall to the area of 72.50 – 62.55. In this scenario, critical stop loss level is 100.87.

 

[SOLIDECN]

Crude Oil - A fall is possible.

On the daily chart, the first wave of the higher level (1) formed, and a downward correction develops as the second wave (2), within which the wave А of (2) forms. Now, the fifth wave of the lower level v of A is developing, within which the wave (iii) of v has formed, a local correction has ended as the wave (iv) of v, and the wave (v) of v is developing.

If the assumption is correct, the price of the asset will fall to the area of 67 – 52.25. In this scenario, critical stop loss level is 83.58.