internationalityOilpriceinternational oil market, oil supply,crude oil demand,Brandtcrude(LCOC1)analyze:
•U.S. dollar surge adds to bearishness in crude oil markets
• APIThe surprise of the data comes a little laterEIAA harbinger of inventory results?
•U.S. and allies sanctions support oil prices
•ChinaPMIand lockdown measures hurt crude demand expectations
•Triangle breakout imminent
Crude Oil Fundamentals Background
BrentBrent crude oil prices fell yesterday asAPIWeekly crude inventories reported an unexpected build, while the Fed’s Brainard said it was beginning to shrink its balance sheet rapidly, leading to a rally in the dollar (traditionally inversely related to oil).
upcoming releaseEIAInventory Report (East8zone time22:30) will be the focus of attention, especially if the actual results differ fromAPIThe unexpected increase in inventory is similar.
Crude Oil Economic Calendar
source:DailyFXEconomic Calendar
In addition to the aforementioned supply-side headwinds, China’s lockdown andCOVID-19Cases are rising, easing demand for crude oil in one of the world’s major importers.Announced earlier this morning3Monthly Caixin ComprehensivePMIData reinforces impact of lockdown, from previous50.1down to43.9.
Further sanctions on Russia by the U.S. and other allies have provided some support for crude as a supply crunch could ensue if Russian oil and gas imports fall further. around the International Energy Agency (IEA) details of the coordinated release are still in the works, throwing oil markets into a rut of uncertainty, as reflected in the price action of Brent.
technical analysis
Brent crude oil (LCOc1) daily chart
Chart compiled by IG’s Warren Venketas
The daily chart for Brent is trading at the apex of a medium-term symmetrical triangle formation (black), a pivotal moment.oil price stuck100dollar and109.03Dollar(23.6%Fibonacci levels), a breakout on either side is possible. The author will use daily candles to confirm the directional breakout, but as the fundamentals continue to fluctuate, the possibility of a false breakout in oil prices should not be ruled out.
key resistance level:
• 120.50Dollar
• $109.03/20skyEMAmoving average(Purple)
•triangle resistance(black)
key support level:
•triangle support/50skyEMAmoving average(blue)
• 100Dollar
• 100skyEMAmoving average(yellow)
IGClient sentiment suggests oil prices tend to fall short-term
IGCS(IGClient Sentiment) showed that retail traders were slightly net-long on crude oil,59%of retail traders currently hold long positions (as of this writing).existDailyFXwe typically take the opposite view of retail trader sentiment, with oil prices leaning bearish.
(Written by Warren Venketas, translated by Eunice Li)
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