Crude Oil by Solid ECN

[SOLID ECN LLC]

Crude Oil, the price may fall.

On the daily chart, the upward wave C forms, within which the first wave 1 of (1) of C developed, and a downward correction develops as the second wave 2 of (1) of C. Now, the wave of the lower level a of 2 is developing, within which a local correction has ended as the wave (ii) of a.

If the assumption is correct, the price will fall to the levels of 82.3 - 67. In this scenario, critical stop loss level is 131.42.​

 

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Crude Oil, oil holds near 109

During the Asian session, quotations of Brent Crude Oil show restrained growth, trying to consolidate above the psychological level of 109.

Yesterday, the instrument was actively decreasing, which analysts attribute to fears of a sharp drop in demand for oil products from China. Since Monday, authorities in the city of Shanghai have announced the biggest lockdown since the start of the pandemic. In particular, almost half of the city will be closed for mass testing for COVID-19 for four days, after which the other half of the city will be closed for another four days. All city enterprises, except those that provide life support, will be sent to a remote mode of operation, and residents will not be able to leave their apartments even for grocery shopping.

Additional pressure on the quotes of Brent Crude Oil was provided by reports of new rocket attacks on oil facilities in Saudi Arabia. Today, in the context of a possible decrease or even a hypothetical cessation of Russian energy supplies, Saudi Arabia and the United Arab Emirates act as countries that can compensate for possible losses in the world market, but OPEC+ is not in a hurry to increase quotas for a monthly increase in production volumes. The cartel's next meeting should take place at the end of the month, and any hint of a change in current production plans could lead to noticeable fluctuations in quotes.

On Tuesday, markets are waiting for the publication of a report from the American Petroleum Institute (API) on the dynamics of "black gold" stocks for the week of March 25. The previous document reflected their decline by 4.28M barrels.

On the daily chart, Bollinger bands are trying to turn into a horizontal plane: the price range remains practically unchanged but remains quite spacious for the current level of activity in the market. MACD falls, keeping a strong sell signal. Stochastic demonstrates similar dynamics, indicating that the instrument may become oversold in the ultra-short term.

Resistance levels: 109, 112, 115.5, 118.32.
Support levels: 106, 102.8, 100, 96.5.​

 

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Brent Crude Oil: oil market expects major changes​

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Benchmark Brent Crude Oil prices are currently trading below 108.00 as geopolitical tensions eased after talks between Russian and Ukrainian delegations in Turkey yesterday.

Yesterday, the CNBC TV channel published a report on the reorientation of Russian oil supplies to Asian markets. According to experts, there is no talk of a complete change in the transportation route, but according to data for the first quarter of 2022, it is planned to increase exports to India significantly. Since the beginning of March, about 6M barrels have already been sent to the country, which is half of last year's total volume, and a 20% discount on supplies has also been provided. Also, it is reported that a preliminary agreement has also been reached with China, and if it is eventually signed, this could make serious changes to the global energy market and support Brent Crude Oil quotes. Also, the Ministry of Energy of Saudi Arabia announced the intention of the kingdom to increase production in 2022 and the possible appearance of an excess of oil of about 2M barrels per day on the market in this case.

Yesterday's report on stocks from the American Petroleum Institute (API) showed a decrease in stocks by 3.000M barrels, while last week, the reduction was 4.280M. If today's US Department of Energy (EIA) statistics also reflect a decrease in stocks, this will support the oil price.

On the global chart, the price continues to clamp within the formation of the global Triangle pattern. Technical indicators keep a buy signal that is not clear enough. Indicator Alligator's EMA fluctuations range narrows, and the histogram of the AO oscillator forms downward bars in the buy zone.

Support levels: 106.3, 96 | Resistance levels: 118, 131.​

 

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Crude Oil, US considers plan to release 180M barrels of oil​

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WTI Crude Oil lost about $5 a barrel on Thursday after reports that US authorities are considering releasing up to 180M barrels of "black gold" from their reserves, the largest energy release in the nearly 50-years history of the Strategic Oil Reserve. The measure will aim to combat the rapid rise in gasoline prices and the reduction in energy supplies against the backdrop of anti-Russian sanctions imposed after the start of a special military operation in Ukraine. Against this backdrop, US West Texas Intermediate futures for May delivery fell 5.8% to 101.59 dollars per barrel after hitting a low of 100.85 earlier.

The OPEC+ meeting will take place today at 12:00 (GMT+2). It is expected that the cartel will continue to adhere to previously announced plans for oil production, and quotas will increase by 400K barrels per day. It is reported that in February, the participants fulfilled the agreement by 136%.

The release of additional US oil to the market may be effective in reducing volatility and containing sharp upward movements, but since OPEC+ remains unwilling to increase production significantly, this decision will not be able to affect prices in the long term. Also, investors will observe the course of hostilities and negotiations aimed at a ceasefire on the territory of Ukraine. A potential de-escalation of the military conflict could stop the sharp rise in energy prices, but the imposed sanctions against Russia and the inability to replace Russian oil in a short period will put upward pressure on the market.
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The long-term trend is upwards. After reaching 130.00, the quotes went into correction and tested the support level of 95.00, from which a new upward impulse began, which continued to 117.50. This week, market participants are testing the support level of 103.00, which will bring the instrument to 117.50. The breakdown of 103.00 will be the catalyst for a decline to 95.00.

The medium-term trend remains upward. Currently, the price is trying to consolidate below the key support zone 106.21–105.01. If successful, the trend will change to a downtrend, and the target for sales will be target zone 2 (94.21–93.01). If the key support of the trend is held, then the growth will continue with the target of around 119.66–118.46.

Resistance levels: 117.5, 130 | Support levels: 103, 95, 85.​

 

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Brent Crude Oil, oil prices are falling​

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The instrument develops the downward momentum that formed yesterday when the market responded with sales to new statements by US President Joe Biden about his intention to additionally send 1M barrels per day to the market from the strategic reserve (SPR). It is expected that such a measure will be in effect for the next six months and will allow prices to stabilize at current levels or lower in the face of uncertainty regarding energy supplies from Russia. Also, Biden instructed to work out new measures to support American producers of "black gold," which will also potentially contribute to the development of corrective dynamics in the commodity areas.

Meanwhile, the OPEC+ meeting, which took place yesterday, again did not lead to any changes in the market. Despite pressure from the United States, the cartel refused to increase production: it will increase only by the planned 432K barrels per day for May. Analysts note that OPEC fears sharp fluctuations in supply and demand dynamics in the market and therefore avoids additional influence on the situation, given the sharply increased geopolitical risks.

On Friday, also to the March report on the US labor market, the focus of traders will be statistics from Baker Hughes on active oil platforms. The previous report for the week of March 25 showed an increase in active drilling units from 524 to 531 units.
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On the daily chart, Bollinger Bands are moving flat. The price range is actively narrowing, reflecting the ambiguous nature of trading in the short term. The MACD indicator is going down, keeping a strong sell signal (the histogram is below the signal line). Stochastic demonstrates similar dynamics, but the indicator line is rapidly approaching its lows, indicating that the instrument may become oversold in the ultra-short term.

Resistance levels: 106, 109, 112, 115.5 | Support levels: 102.8, 100, 96.5, 93.34​

 

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Brent Crude Oil, price correction may continue

Last week, Brent Crude Oil quotes corrected downwards and reached the area of 103.70 against the background of measures taken by the US administration and international structures to stabilize the global oil market.

So, the head of the White House Joe Biden announced the withdrawal of an additional 1M barrels per day from The Strategic Petroleum Reserve (SPR). This process will continue for six months, which will lead to the release of approximately 180M barrels of "black gold". The members of the International Energy Agency also agreed to a new coordinated release of part of the strategic reserves to the market, but its details have not yet been disclosed. Of the local factors of pressure on energy quotes, it is worth highlighting the conclusion of a truce in Yemen between local Houthi rebels and the government forces of Saudi Arabia. The agreement includes the cessation of offensive military operations, as well as permits the import of fuel to areas controlled by the Houthis, and eliminates the threat of new attacks on oil-producing infrastructure. The development of a new wave of the COVID-19 pandemic in China has a negative impact on energy quotes, which may reduce demand from the world's leading consumer.

Nevertheless, according to experts, all these circumstances will only lead to a temporary price correction, but will not be able to meet the demand for "black gold" in the mid-term. The fact is that the volumes of SPR brought to the market will not be able to compensate for the departure of Russian exporters, who now supply up to 3M barrels of oil per day. Experts also believe that American oil companies will prefer to extract excess profits instead of investing in production and knocking down rapidly rising prices, however, a continuation of the decline in quotations in the short term is quite likely.
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Now the price is in the area of 106.2 and may continue the downward trend to 100, 92.8 (Fibo retracement 61.8%). The key for the "bulls" is the level of 112.5 (the middle line of the Bollinger Bands, Murray [1/8]), at the breakout of which the asset can strengthen to 117 and 125, however, the decline option still looks more preferable, since the Bollinger Bands and the Stochastic are directed downwards, and the MACD histogram is preparing to move into the negative zone.

Resistance levels: 112.5, 117, 125 | Support levels: 100, 92.8​

 

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WTI Crude Oil, Saudi Arabia raised oil prices in May

Energy assets continue to add value amid calls by EU leaders for the introduction of new anti-Russian sanctions in response to the events in Ukraine. Now the price of North American WTI Crude Oil is being adjusted in an uptrend and is at around 103.46.

Earlier, the US authorities proposed another plan to stabilize the global oil market, for the implementation of which it is planned to use reserves from the US strategic reserve. In particular, the head of the White House, Joe Biden, announced the launch of an additional 1M barrels per day on the market within six months, which will lead to the release of approximately 180M barrels of "black gold". Now it is difficult to assess how much this decision will put pressure on quotes, but Saudi Arabia immediately responded by adjusting its pricing policy. Thus, the state-owned Saudi Aramco company, which accounts for more than 60% of its supplies to Asia, and among the largest buyers are China, Japan, South Korea and India, announced that it is raising selling prices for all grades of oil that will be delivered to the Asian and American markets in May. In particular, the price of Arab Light grade oil for Asian buyers will rise to 9.35 dollars per barrel, and for American buyers – to a record 5.65 dollars per barrel. For European consumers, the price of Arab Light will increase by 3 dollars, and Brent Crude Oil – by 4.6 dollars comparing to April quotes. The management of Saudi Aramco made this decision after OPEC+ last Thursday confirmed plans for a gradual increase in production by 400K barrels per day in accordance with the schedule of gradual growth, despite the jump in energy prices observed on the market.​

On the daily chart of the asset, the price continues to trade within the global "triangle" pattern, before the end of the formation of which there is not much time left. Technical indicators do not give a single signal: the range of EMA fluctuations on the alligator indicator has begun to narrow again, and the histogram of the AO oscillator forms new descending bars, being close to the transition level.

Resistance levels: 107.43, 122 | Support levels: 97.17, 87.2​

 

[SOLID ECN LLC]

Crude Oil, oscillatory dynamics ahead of new anti-Russian sanctions​

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During the Asian session, the price of Brent Crude Oil rose modestly, partially recovering from yesterday's decline. The development of the Russian-Ukrainian crisis influences the dynamics of the asset, an increase in the supply of energy resources, and a drop in demand from China, the largest consumer, due to an increase in the incidence of COVID-19. The instrument is again trying to consolidate above 106.00, receiving support from fears of new EU sanctions against Russian energy imports.

Yesterday, US national security adviser Jake Sullivan said that Washington would announce new measures that could affect the energy sector this week. The "hawkish" rhetoric was supported by French President Emmanuel Macron and German Chancellor Olaf Scholz. It is reported that the EU is also preparing a package of sanctions, which, among other things, may contain an embargo on the import of coal, oil, and gas from the Russian Federation, as well as a ban on Russian ships from entering the ports of the EU countries. Despite strong pressure both within the region and from outside the United States, Germany, the largest buyer of Russian energy resources in the European Union, and, for example, Hungary, oppose any significant restrictions on oil and natural gas supplies, reasonably fearing for their energy security.

Yesterday, pressure on the asset was exerted by the American Petroleum Institute (API) report data on reserves. On April 1, the indicator rose by 1.08M barrels after a decrease of 3M barrels in the previous period. The positive dynamics are associated with measures to release strategic reserves, which US President Joe Biden previously announced. Still, fears of new restrictions on Russia offset the impact on the market of the rhetoric of the US authorities and the International Energy Agency (IEA), although last week, this step contributed to decreasing in quotations of "black gold."

On the daily chart, Bollinger bands reverse into a horizontal plane: the price range narrows slightly from below, reflecting the ambiguous nature of trading in the short term. The MACD indicator is going down, keeping a poor sell signal (the histogram is below the signal line). Stochastic, on the contrary, retains a fairly confident upward direction, which is still poorly correlated with the real dynamics of the market.

Resistance levels: 106, 109, 112, 115.5 | Support levels: 102.8, 100, 96.5, 93.34.

 

[SOLID ECN LLC]

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The price of North American WTI Crude Oil is correcting within a downtrend around 97.00, having lost more than 5.7% in value yesterday.

As it became known yesterday, 29 member countries of the International Energy Agency (IEA) will release up to 120M barrels of "black gold" from their reserve storage facilities. There has never been such an intervention in the history of the oil market, and the main goal of this operation is to stabilize the exchange rate of energy carriers, whose quotes continue to be around 100 dollars per barrel. It is expected that 60M barrels of the total volume will be allocated by the United States and the remaining 60M – by other countries of the agreement: Japan, Australia, and the states that are members of the EU.

The asset's local dynamics were influenced by data on reserves from the American Petroleum Institute (API) and the International Energy Agency (EIA). According to the API report, weekly oil stocks increased by 1.080M barrels after falling by 3.000M barrels last week, while the EIA reported an increase of 2.421M barrels after falling last week by 3.449M barrels.

After yesterday's decline on the daily chart of the asset, the first signs of the beginning of the implementation of the Triangle pattern appeared. The price tried to consolidate below the support line of the pattern. Technical indicators gave a signal to start selling: indicator Alligator's EMA fluctuations range began to expand downwards, and the histogram of the AO oscillator forms downward bars in the sell zone.

Resistance levels: 102.87, 113.75 | Support levels: 93.40, 83.93​

 

[SOLID ECN LLC]

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On the daily chart, the upward wave C develops, within which the first wave 1 of (1) of C formed, and a downward correction develops as the second wave 2 of (1) of C. Now, the wave a of 2 is forming, within which the local correction (ii) of a has ended, and the third wave (iii) of a is developing.

If the assumption is correct, the price will fall to the levels of 77.08 - 62.5. In this scenario, critical stop loss level is 122.93.
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